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.