A company manufacturing two products uses standard costing system. The following data relating to
August 2007 have been furnished to you:
|
Particulars |
Product A |
Product B |
||
|
Standard Cost Per Unit &Direct Materials |
Rs.2 |
Rs.4 |
||
|
Direct Wages |
Rs.8 |
Rs.6 |
||
|
Fixed Overheads |
Rs.16 |
Rs.12 |
||
|
Total |
Rs.26 |
Rs.22 |
||
|
Units processed/in process |
|
|
||
|
Beginning of the month, all materials applied |
4, 000 |
12, 000 |
||
|
End of the month, all materials applied and 80% |
8, 000 |
12, 000 |
||
|
Units completed and transferred to warehouse |
16, 000 |
20, 000 |
||
You may use average cost method to analyse
The following were the actual costs recorded during the month.
Direct materials purchased at standard price amount to Rs.2, 00, 000 and actual cost of which is Rs.2, 20, 000. Direct materials used for consumption at standard price amount to Rs.1, 75, 000. Direct wages for actual hours worked at standard wages rates were Rs.4, 20, 000 and at actual wages rate were Rs.4, 12, 000. Fixed overheads budgeted were Rs.8, 25, 000 and actual fixed overheads incurred were Rs.8, 50, 000.
Required,
I. Direct material price variance at the point of consumption and at the point of purchase
II. Direct material usage variance
III. Direct wage rate and efficiency variance
IV. Fixed overheads volume and expenditure variance
V. Standard cost of WIP at the end of the month.