From the following particulars, find the (a) Material cost variance and (b) Material price variance. Quantity of material purchased 3,000 units Value of materials purchased Rs 9,000 Standard quantity of material required per tonne of finished product: 30 units Standard rate of material Rs 2 per unit Opening stock of material Nil Closing stock of material 500 units Finished production during the period 80 tonnes
From the following particulars, find the (a) Material cost variance and (b) Material price variance. Quantity of material purchased 3,000 units Value of materials purchased Rs 9,000 Standard quantity of material required per tonne of finished product: 30 units Standard rate of material Rs 2 per unit Opening stock of material Nil Closing stock of material 500 units Finished production during the period 80 tonnes
Chapter1: Financial Statements And Business Decisions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:From the following particulars,
find the (a) Material cost variance
and (b) Material price variance.
Quantity of material purchased
3,000 units Value of materials
purchased Rs 9,000 Standard
quantity of material required per
tonne of finished product: 30
units Standard rate of material Rs
2 per unit Opening stock of
material Nil Closing stock of
material 500 units Finished
production during the period 80
tonnes
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