Model: Material-cost variance
The following information has been extracted from the records of a chemical company:
|
Standard price |
: Raw material ‘A’ – Rs. 2 per kg. |
|
Raw material ‘B’– Rs. 10 per kg. |
|
|
Standard mix |
: A – 7%; B – 25 % (By weight). |
|
Standard yield |
: 90 %. |
In a period, the actual costs, usages and output were as follows:
|
Used : |
2,200 kgs of ‘A’ costing Rs. 4,650. |
|
800 kgs of ‘B’ costing Rs. 7,850. |
|
|
Output : |
2,850 kgs of products. |
You are required to calculate material-cost variances.