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    Practice Problems Standard Cost

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    lulughosh
    The document provides standard and actual information for overhead and production quantities for a manufacturing company using standard costing. It asks to calculate various overhead variances, including variable overhead, fixed overhead cost, fixed overhead expenditure, fixed overhead volume, fixed overhead efficiency, and fixed overhead calendar variances. Standard rates and actual results are used to calculate the differences for each variance.

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    Practice Problems Standard Cost

    Uploaded by

    lulughosh
    3K views5 pages
    The document provides standard and actual information for overhead and production quantities for a manufacturing company using standard costing. It asks to calculate various overhead variances, including variable overhead, fixed overhead cost, fixed overhead expenditure, fixed overhead volume, fixed overhead efficiency, and fixed overhead calendar variances. Standard rates and actual results are used to calculate the differences for each variance.

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    The document provides standard and actual information for overhead and production quantities for a manufacturing company using standard costing. It asks to calculate various overhead variances, including variable overhead, fixed overhead cost, fixed overhead expenditure, fixed overhead volume, fixed overhead efficiency, and fixed overhead calendar variances. Standard rates and actual results are used to calculate the differences for each variance.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    3K views5 pages

    Practice Problems Standard Cost

    Uploaded by

    lulughosh
    The document provides standard and actual information for overhead and production quantities for a manufacturing company using standard costing. It asks to calculate various overhead variances, including variable overhead, fixed overhead cost, fixed overhead expenditure, fixed overhead volume, fixed overhead efficiency, and fixed overhead calendar variances. Standard rates and actual results are used to calculate the differences for each variance.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
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    of 5

    Standard Cost Problem 1 The following was the composition of a gang of workers in a factory during a particular month, in one

    of the production departments. The standard composition of workers and wage rates per hour were as follows. Skilled: Two workers at a standard rate of Rs.20 per hour each Semi-Skilled: Four workers at a standard rate of Rs.12 per hour each Unskilled: Four workers at a standard rate of Rs.8 per hour each. The standard output of the gang was four units per hour of the product. During the month in uestion, howe!er the actual composition of the gang and hourly rates paid were as under Skilled: 2 workers " Rs.20 per hour Semi-Skilled: # workers " Rs.1$ per hour Un-skilled: % workers " Rs.10 per hour The gang was engaged for 200 hours during the month, which included 12 hours when no production was possi&le due to the machine &reakdown. 810 units of the product was recorded as output of the gang during the month. 'alculate !arious la&our !ariances. Solution: The following ta&le is prepared to compute the !ariances. Category of Workers Standard Composition of Gang 2 $ $ Standard Rate Rs. 20 12 8 $0 Standard Cost Rs. $0 $8 #2 120 Actual Composition of Gang and number of hrs 2 ) 200 * $00 # ) 200 * ,00 % ) 200 * 1000 10 ) 200 * 2000 Actual Rate Rs. 20 1$ 10 Actual Cost Rs. 8, 000 8, $00 10, 000 2,, $00

    (killed (emi+skilled -n+skilled Total ./

    Labour Cost Variance: (tandard 'ost for 0ctual 1roduction 2 0ctual 'ost

    Ra.2$, #00 2 Rs.2,, $00 * Rs.2, 100 30/ 4ote5 (tandard la&our cost for actual production5 For 1 man+hour the standard cost is Rs.120 as shown in the ta&le. .n one hour $ units are produced and so the standard la&our cost per unit is Rs.1206$ units * Rs.#0 per unit. Thus standard la&our cost for actual production will &e 810 units ) Rs.#0 * Rs.2$, #00. 0ctual la&our cost is shown in the ta&le. ../ Labour Rate Variance: 0ctual 7ours 3(tandard Rate 2 0ctual Rate/ (killed5 $00 3Rs.20 2 Rs.20/ * 4il (emi+skilled5 ,00 3Rs12 2 Rs.1$/ * Rs.1200 30/ -n+skilled5 1000 3Rs.8 2 Rs.10/ * Rs.2000 30/ Total 8a&our Rate 9ariance * Rs.#200 30/

    Problem 2
    The standards material cost to produce a ton of chemical ) is gi!en &elow5 #00 kg of material 0 " Rs.10 per kg

    $00 kg of material : " Rs.% per kg %00 kg of material ' " Rs., per kg During a particular period, 100 tons of mi;ture ) was produced from the usage of #% tons of material 0 " Rs.<, 000 per ton $2 tons of material : " Rs.,, 000 per ton %# tons of material ' " Rs.=, 000 per ton 'alculate material cost, price, and usage and mi; !ariances. Solution: The following ta&le is prepared for computation of the !ariances. aterial Standard Standard !uantity Rate Rs. "g #00 kg $00 %00 1200 10 % , Standard Cost Rs. #000 2000 #000 8000 Actual !uantity "g #%, 000 $2, 000 %#, 000 1, #0, 000 Actual Rate Rs. < , = Actual Amount Rs. #, 1%, 000 2, %2, 000 #, =1, 000 <, #8, 000

    0 : ' Total ./

    Material Cost Variance: (tandard 'ost 3for actual production/ 2 0ctual 'ost

    Rs.8, 00, 000 2 Rs.<, #8, 000 * Rs.1, #8, 000 30/ 4ote5 (tandard cost of materials for actual production5 For 1 ton of production, the standard cost is Rs.8, 000, so for 100 tons, the standard cost is Rs.8, 00, 000 ../ Material Price Variance: 0ctual >uantity 3(TD 1rice 2 0ctual 1rice/ ? ? ? ? ? ? ? ? @aterial 0 * #%, 000 3Rs.10 2 Rs.</ * Rs.#%, 000 3F/ @aterial : * $2, 000 3Rs.% 2 Rs.,/ * Rs.$2, 000 30/ @aterial ' * %#, 000 3Rs., 2 Rs.=/ * Rs.%#, 000 30/ Total @aterial 1rice 9ariance * Rs.,0, 000 30/ @aterial 0 * Rs.10 3#0, 000 2 #%, 000/ * Rs.%0, 000 30/ @aterial : * Rs.% 3$0, 000 2 $2, 000/ * Rs.10, 000 30/ @aterial ' * Rs., 3%0, 000 2 %#, 000/ * Rs.18, 000 30/ Total @aterial >uantity 9ariance * Rs.=8, 000 30/

    .../ Material Quantity Variance * (tandard 1rice 3(TD >uantity 2 0ctual >uantity/

    .9/ Material Mix Variance * (td 'ost of (td @i; 2 (td 'ost of 0ctual @i; Rs.8, ,,, ,,= 2 Rs.8, =8, 000 * Rs.11, ### ? 4ote5 (tandard 'ost of (tandard @i; is computed as under ? .f 0ctual mi; would ha!e &een in the standard proportion, the uantities of material 0, : and ' would ha!e &een, ? ? ? ? ? 05 #0061200 :5 $0061200 '5 %0061200 1, #0, 000 * #2, %00 ) Rs.10 * Rs.#, 2%, 000 1, #0, 000 * $#, ###.## ) Rs.% * Rs.2, 1,, ,,= 1, #0, 000 * %$, 1,,.,= ) Rs., * Rs.#, 2%, 000

    Total standard cost of standard mi; * Rs.8, ,,, ,,= (tandard cost of actual mi; has &een computed &y multiplying the actual uantity &y the standard cost.

    Problem #
    The standard cost of a certain chemical mi;ture is as follows5 $0A of @aterial 0 " Rs.200 per ton ,0A of @aterial : " Rs.#00 per ton 0 standard loss of 10A is e;pected in the production. During a particular period materials used are, <0 tons @aterial 0 " Rs.180 per ton 110 tons @aterial : " Rs.#$0 per ton 0ctual production produced was 182 tons of the Bnished goods. 'alculate @aterial 1rice 9ariance, @aterial -sage 9ariance, @aterial @i; 9ariance and @aterial Cield 9ariance. Solution : The following statement will ha!e to &e prepared for calculation of the material !ariances.

    Standards @aterial 0 $0 tons " Rs.200 * Rs.8,000 @aterial : ,0 tons " Total 100 tons * 8ess5 10A (td. 8oss (tandard 1roduction ./ Rs.#00 * Rs.18,000 Rs.2,,000 10 tons <0 tons * Rs.2,,000

    Actuals <0 tons " Rs.180 per ton * 110 tons " Rs.#$0 per ton * 200 tons * Rs.%#,,00 8ess5 0ctual loss 182 tons * Rs.%#, ,00 18 tons

    Rs.1,,200 Rs.#=,$00

    @aterial 1rice 9ariance + 0> 3 (1 2 01/ * @aterial 0 * <03200+180/* Rs.1,8 00 3F/ @aterial : *1103#00+

    #$0/* Rs.$,$ 0030/ Total 1rice 9ariance * Rs.2,, 00 30/ ../ @aterial -sage 9ariance (1 3(> 2 0>/+ @aterial 0 * 200381+<0/* Rs.1,8 0030/ @aterial : * #003121+110/* Rs.#,# 003F/ Total -sage 9ariance * 1,%00 3F/ .../ @aterial @i; 9ariance 2 (td. 'ost of (td. @i; 2 (td. 'ost of 0ctual @i; Rs.%2, 000 2 Rs.%1,000 * Rs.1,000 3F/ .9/ @aterial Cield 9ariance 2 (td. Cield Rate30ctual Cield 2 (tandard yield/ 2,, 0006<03182+180/ * Rs.%==.==3F/ (tandard Cield Rate * (tandard cost per unit of standard production

    Problem $
    The following information is a!aila&le from the records of a manufacturing company using standard costing system. Particulars 1roduction Dorking days Fi;ed o!erhead 9aria&le o!erheads $,000 units 20 Rs.$0, 000 Rs.12, 000 Standard #,800 units 21 Rs.#<, 000 Rs.12, 000 Actual

    'alculate the following o!erhead !ariances ./ 9aria&le o!erhead !ariance ../ Fi;ed o!erhead cost !ariance .../ Fi;ed o!erhead e;penditure !ariance

    .9/ Fi;ed o!erhead !olume !ariance 9/ Fi;ed o!erhead efBciency !ariance 9./ Fi;ed o!erhead calendar !ariance Solution: (tandard !aria&le o!erhead rate per unit * :udgeted !aria&le o!erheads6 &udgeted num&er of units * Rs.12, 0006 $, 000 units * Rs.# (tandard production per day * $, 000 units620 days * 200 units (tandard B;ed o!erhead per day * 200 Computation of %ariances ./ Variable overhead cost variance: 0ctual !aria&le o!erheads 2 Reco!era&le !aria&le o!erheads * Rs.12, 000 2 #, 800 units Rs.# * ,0030/ ../ ixed overhead variance: (tandard B;ed o!erheads for actual production 2 0ctual B;ed o!erheads * #, 800 units Rs.10 2 Rs.#<, 000 * Rs.1, 000 30/ .../ ixed overhead ex!enditure variance: :udgeted B;ed o!erheads 2 0ctual B;ed o!erheads * Rs.$0, 000 2 Rs.#<, 000 * Rs.1, 000 3F/ .9/ ixed overhead volume variance: Reco!era&le o!erheads 2 :udgeted o!erheads Rs.#8, 000 2 Rs.$0, 000 * Rs.2, 000 30/ 9/ ixed overhead e"#ciency variance: (tandard B;ed o!erhead rate per day 30ctual time 2 standard time for actual output/ * Rs.2, 000 3 21 2 1</ * Rs.$, 000 3F/ 9./ ixed overhead calendar variance: (tandard B;ed o!erhead rate per day 30ctual days 2 :udgeted days/ * Rs.2, 000 321 2 20/ * Rs.2, 000 3F/ Rs.10 * Rs.2, 000

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