STANDARD COSTING - PRIMEprimevisionclasses.in/wp-content/uploads/2017/03/Standard-Costin… · STANDARD COSTING 3 Labour Statement Given Std. Comparable Std. Actuals (360 Std. Hours)

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STANDARD COSTING

HOMEWORK A.1. WN 1: Calculation of effect on the profit due to market size

= increase size to due units in Growth(total) units in Growth

growth to due profit in Increase

= %)3000,00,4(000,1220,000

1,40,000

(4,20,000 – 4,00,000)

= 84,000 (F)

WN 2: Calculation of effect on profit due to increase in market share

= 000,820,000

1,40,000 = 56,000

WN 3: Calculation of effect on profit due to product differentiation

Particulars Amount

Increase in profit due to market share (WN 2) 56,000

Increase in profit due to changes in price (given) 1,64,000

2,20,000

Operating statement showing the effect of size, productivity and product differentiation on the profit of 2016

Particulars Amount

Profit of 2015 10,80,000

(+) Increase in profit due to market size increase (WN 1) 84,000

(+) Increase in profit due to productivity factor (given) 58,000

(+) Increase in profit due to product differentiation (WN 3) 22,000

14,42,000

A.2. WN 1: Calculation of standard hours for actual days

= months 12

hours 1,86,000= 15,500 hours

WN 2: Calculation of actual hours

= 22 days 100 workers 8 hours

= 17,600 hours

WN 3: Calculation of standard hours for actual output

= X Y

(1200 8) (800 12)

= 19,200 hours

Now,

Capacity Ratio = 100days actual for hrs. Std.

Hours Actual = 100

15,500

17,600 = 113.55%

Efficiency Ratio = 100Hours Actual

Output Actualfor hrs. Std. = 100

17,600

19,200 = 109.09%

Volume Ratio/Activity Ratio = 100Days Actualfor hours Std.

Output Actualfor hours Std. = 100

15,500

19,200 = 123.87%

Inter-relationship:

Volume Ratio = Capacity Ratio Efficiency Ratio= 113.55% 109.09%= 123.87%

PRIME VISION / C.A. FINAL / ADVANCED MANAGEMENT ACCOUNTING / STANDARD COSTING

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A.3. Material Statement

Given Std. Comparable Std. Actuals (1 unit) (6,000 units) (6,000 units)

Type Qty. Qty. Rate Amt. Qty. Rate Amt.

(6,000 2) - 2 12,000 6 72,000 12,670 570 72,219

MCV = SC – AC

= (72,000 – 72,219)

MCV = 219 (A)

MPV = (SR – AR) AQ

= (6 – 5.7) 12,670

MPV = 3,801 (A)

MUV = (SQ – AQ) SR

= (12,000 – 12,670) 6

MUV = 4,020 (A)

Labour and variable overhead statement

Given Std. Comparable Std. Actuals (1 unit) (6,000 units) (6,000 units)

Type Hours Hours Rate Amt. Hours Rate Amt.

DL 1 6,000 4.40 26,400 6,500 4.30 27,950 (6,000 1) (WN 1) (27,950/6,500)

VOH 1 6,000 3 18,000 6,500 3.15 20,475 (6,000 1) (WN 1) (20,475/6,500)

WN 1: Calculation of Actual Hours

VOH Eff. V = (SH – AH) SR

- 1,500 = (6,000 – AH) 3

- 500 = 6,000 – AH

AH = 6,500

LCV = SLC – ALC = 26,400 – 27,950= 1,550 (A)

LRV = (SR – AR) AH = (4.4 – 4.30) 6,500= 650 (F)

LEV = (SH – AH) SR = (6,000 – 6,500) 4.40= 2,200 (A)

VOHCV = SVOHC – AVOHC = 18,000 – 20,475= 2,475 (A)

VOH Exp. V = (SR – AR) AH = (3 – 3.15) 6,500= 975 (A)

VOH Eff. V = (SH – AH) SR = (6,000 – 6,500) 3= 1,500 (A)

A.4. a) Calculation of total no. of workers in each category

Labour Rate Variance for semi-skilled workers is 160 (F)

LRV = (SR – AR) AH

160 = (3 – 2) AH

AH = 160 hours

In a week, each workers works for 40 hours

No. of semi-skilled workers = 160/40 = 4

No. of unskilled workers = Half of semi-skilled = 2

Total no. of workers = 9 – 4 – 2 = 3 skilled workers


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Labour Statement

Given Std. Comparable Std. Actuals

(360 Std. Hours) (270 Std. Hours) (270 Std. Hours)


Skilled 160 120 6 720 120 7 840

(4 40) (270/360160) (340)

Semi-skilled 120 90 3 270 160 2 320

(340) (270/360120) (440)

Unskilled 80 60 1 60 80 2 160

(240) (270/36080) (240)

Total 360 270 1,050 360 1,320

LCV = (SLC – ALC) = 1,050 – 1,320 = 270 (A)


Skilled = (6 – 7) 120 = 120 (A)

Semi = (3 – 2) 160 = 160 (F)

Unskilled = (1 – 2) 80 = 80 (A)

40 (A)

LEV = (SH – AH) SR

Skilled = (120 – 120) 6 = 0

Semi = (90 – 160) 3 = 210 (A)

Unskilled = (60 – 80) 1 = 20 (A)

230 (A)

LMV = (Given Mix – AH) SR

Skilled = (160 – 120) 6 = 240 (F)

Semi = (120 – 160) 3 = 120 (A)

Unskilled = (80 – 80) 1 = 0

120 (F)

LNEV = (TSH- TAH) Std. Avg. Rate

= (270 – 360) 1,050/270= 350 (A) Note:

1) While calculating LMV, there is no need to calculate the Revised Standard Mix because the given mix is already comparable with the actuals.

2) In the said question, output is not expressed in real terms but it is expressed in terms of equivalent std. hours and as per the standards if one hour is worked output should be equal to one standard hour.



(1 unit) (8,000 units) (8,000 units)

Qty. Qty. Rate Amt. Qty. Rate Amt.

2 16,000 20 3,20,000 16,500 24 3,96,000

(16,00020) (3,96,000/16,500)

MCV = SC – AC = 3,20,000 – 3,96,000= 76,000 (A)

MPV = (SR – AR) AQ= (20 – 24) 16,500= 66,000 (A)

MUV = (SQ – AQ) SR = (16,000 – 16,500) 20= 10,000 (A)


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Labour Statement


(1 unit) (8,000 units) (8,000 units)


Labour 20 1,60,000 2 3,20,000 1,70,000 2.04 3,46,800

(1,60,0002) (3,46,800/1,70,000)

VOH 20 1,60,000 0.4* 64,000 1,66,000 0.3694 60,000

(Net hrs.) (60,000/1,66,000)

(1,70,000-4,000)

LCV = SLC – ALC= 3,20,000 – 3,46,800= 26,800 (A)

LRV = (SR – AR) AH= (2 – 2.04) 1,70,000= 6,800 (A)

LEV = (SH – AH) SR= (1,60,000 – 1,70,000) 2= 20,000 (A)

VOHCV = SVOHC – AVOHC= 64,000 – 60,000= 4,000 (F)

VOH Exp. V = (SR – AR) AH= (0.4 – 0.3614) 1,66,000= 6,400 (F)

VOH Eff. V = (SH – AH) SR= (1,60,000 – 1,66,000) 0.4= 2,400 (A)

Idle Time Variance = Idle Hours SR= 4,000 2= 8,000 (A)

LNEV = (TSH – TAH) Std. Avg. Rate= (1,60,000 – 1,66,000) 2= 12,000 (A)

Fixed Overhead Statement

Particulars Standards Actuals Standard Calculations

Unit 10,000 8,000 1 unit = ₹ 20

Overhead 2,00,000 1,84,000 1 hour = ₹ 1

(10,000 20) 1 unit = 20 hours

Hours 2,00,000 1,70,000

8,000 1,60,000

10,000 (?)

Idle Hrs. - 4,000

FOH Cost Variance = FOH recorded – FOH incurred

= [(8,000 20) – 1,84,000]

FOHCV = 24,000 (A)

FOH Exp. Variance = Std. FOH – Actual FOH

= 2,00,000 – 1,84,000

= 16,000 (F)

FOH Volume Variance = (SQ – AQ) Std. Recovery Rate per unit

= (10,000 – 8,000) 20= 40,000 (A)

FOH Capacity Variance = (Std. hours for Actual Day – AH) Std. Recovery Rate per hour

= (2,00,000 – 1,70,000) 1= 30,000 (A)

FOH Efficiency Variance = (Std. hrs. for A.O. – AH) Std. Recovery Rate per hour

= [(8,000 20) – 66,000) 1= 6,000 (A)

Idle Time Variance = Idle Hours Std. Recovery Rate per hour

= 4,000 1= 4,000 (A)


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Sales Statement

Given Standard Standards (1 year) Actuals (1 year)

Type Qty. Qty. SP Amount Qty. SP Amount

- - 10,000 140 14,00,000 8,000 140 11,20,000

(11,20,000/8,000)

Sales Value Variance = Std. Sales Value – Actual Sales Value

= 14,00,000 – 11,20,000 = 2,80,000 (A)

Sales Price Variance = (Std. SP – Actual SP) A.Q.

= (140 – 140) 8,000

= Nil

Sales Volume Variance = (SQ – AQ) Std. SP

(Impact on Sales) = (10,000 – 8,000) 140

= 2,80,000 (A)

Sales Volume Variance = (SQ – AQ) Std. Profit per unit

(Impact on profit) = (10,000 – 8,000) 32 (given)

= 64,000 (A)

Reconciliation Statement reconciling the standard profit with actual profit

Particulars Amount

Standard Profit (32 10,000) 3,20,000

Add/(Less): Variances

Material Price Variance (66,000)

Material Rate Variance (10,000)

Labour Rate Variance (6,800)

Idle Time Variance (8,000)

Labour Net Efficiency Variance (12,000)

Variable OHs Expenditure Variance 6,400

Variable OHs Efficiency Variance (2,400)

Fixed OHs Expenditure Variance 16,000

Fixed OHs Capacity Variance (30,000)

Fixed OHs Efficiency Variance (6,000)


Sales Price Variance Nil

Sales Volume Variance (Impact on Profit) (64,000)

Actual Profit 1,33,200


Given Standard

1 unit

Comparable Standard

(4,000 units)

Actuals

(4,000 units)

Type Kgs. Qty. Rate Amount Qty. Rate Amount

- 3 kgs. 12,000 5 60,000 12,500 5.25 65,625

(WN 1) (WN 3)


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WN 1: Calculation of Actual Quantity Consumed


- 2,500 = (12,000 – AQ) S

- 500 = 12,000 – AQ

= 12,500

WN 2: Calculation of Actual Qty. of Material Purchased

MPV = (SR – AR) AQ Purchased

- 3,250 = (5 – AR) AQP

- 3,250 = 5 AQP – AR . AQP

- 3,250 = 5 AQP – 68,250

5AQP = 65,000

= 13,000

WN 3: Calculation of Actual Purchase Price/Kg.

Ar = 13,000

68,250= 5.25 kgs.

Methods of Calculating Material Price Variance

1) Partial Plan:

Under this method/plan, material price variance is always calculated on the actual quantity of material consumed in that particular period irrespective of the actual quantity purchased.

MPV = (SR – AR) Actual Quantity Consumed

2) Single Plan:

Under this method, material price variance is always calculated on the actual quantity of material purchase in that particular period irrespective of whether the entire quantity purchases has been consumed or not in that period.

MPV = (SR – AR) Actual Quantity Purchased

Labour Statement

Given Standard

(1 unit)

Comparable Standard

(4,000 units)

Actuals

(4,000 units)

Type Hours Hours Rate Amount Hour Rate Amount

- 0.5 2,000 20 40,000 1,900 21 39,900

(WN 4) (WN 5)

WN 4: Calculation of Actual Hours

LEV = (SH – AH) SR

2,000 = (2,000 – AH) 20 = 1,900 hrs.

WN 5: Calculation of AR per hour


- 1,900 = (20 – AR) 1,900

- 1 = 20 – AR

AR = 21 ₹


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i) Standard Direct Labour allowed for actual output achieved = 2,000 hours

ii) Actual Direct Labour allowed = 1,900 hours

iii) Actual Direct Labour Rate = ₹ 21

iv) Standard Quantity of Direct Material allowed (in kgs.) = 12,000 kgs.

v) Actual Quantity of Direct Material used (in kgs.) = 12,500 kgs.

vi) Actual Quantity of Direct Material purchased (in kgs.) = 13,000 kgs. vii) Actual Material Price per kg. = ₹ 5.25

A.7. Sales Statement

Standards (1 year)

Actuals (1 year)

Type Qty. SP Amount Qty. SP Amount

- 6,00,000 100 6 crores 7,00,000 110 7.7 crores

100

crores 6

(assumed)

110

crores 7.70

(100+10%)

Sales Price Variance = (Std. SP – Actual SP) AQ = (100 – 110) 7,00,000 = 70 lacs (F)

Sales Volume Variance = (SQ – AQ) Std. Profit p.u.

(Impact on Profit) = (6,00,000 – 7,00,000) 000,00,6

000,00,40= 6,66,667 (F)

Material Statement

Given Std. (6 lac units)

Comparable Standard (7,00,000 units)

Actuals (7,00,000 units)

Qty. Qty. Rate Amount Qty. Rate Amount

1,20,000 1,40,000 250 3.50 crores 1,35,000 240 3.24 crores

1,20,00

crores 3

250 Rs.

1,40,000

1,35,00

Cr. 3.24


= (250 – 240) 1,35,000

= 13,50,000 (F)


= (1,40,000 – 1,35,000) 250

= 12,50,000 (F)

Labour Statement & Variable Overhead Statement

Given Std.

(6 lac units)

Comparable Standard

(7,00,000 units)

Actuals

(7,00,000 units)

Hours Hours Rate Amount Hours Rate Amount

DL – 24 lacs 28 lacs 5 1.4 crores 26 lacs 5.2692308 1.37 crores

lacs 24

crores 1.2

5

lacs 28

lacs 26

Cr. 1.37

VOH – 24 lacs 28 lacs 2.5 7,00,000 26 lacs 2.6538462 69,00,000

lacs 24

lacs 60

2.5 Rs.

lacs 28

lacs 26

lacs 69


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LRV = (SR – AR) AH = (S – 5.2692308) 26,00,000= 7,00,000 (A)

LEV = (SH – AH) SR = (28,00,000 – 26,00,000) 5= 1,00,000 (F)

VOH Expd. Variance = (SR – AR) AH = (2.5 – 2.6538462) 26,00,000= 4,00,000 (A)

VOH Efficiency Variance = (SH – AH) SR= (28,00,000 – 26,00,000) 2.5= 5,00,000 (F)


Particulars Standards

(1 year)

Actual

(1 year)

Std. Calculations

Overhead 8,00,000 1.50 crores 1 unit = 13.333333

Units 6,00,000 7,00,000

FOH Expd. Variance = Std. FOH – Actual FOH= 80,00,000 – 15,00,000

FOH Expd. Variance = 70,00,000 (A)

FOH Volume Variance = (SQ – AQ) Std. Recovery Rate per unit

= (6,00,000 – 7,00,000) 13.333333= 13,33,333 (F)

Reconciliation Statement reconciling the Budgeted & Actual Profit

Particulars Amount

Budgeted Profit 40,00,000

Add/(Less: Variances

Sales Price Variance 70,00,000

Sales Volume Variance 6,66,667

Material Price Variance 13,50,000

Material Usage Variance 12,50,000

Labour Rate Variance (7,00,000)

Labour Efficiency Variance 10,00,000

VOH Expd. Variance & VOH Eff. Variance (56,66,667)

FOH Expd. Variance & FOH Volume Variance 90,00,000

A.8. Sales Statement

Standards

(1 month)

Actuals

(1 month)

Type Qty. SP Amount Qty. SP Amount

- 20,000 5 1,00,000 14,000 5 70,000

8,000 4.75 38,000

22,000 1,08,000

Sales Volume Variance = (SQ – AQ) Std. Profit p.u.

(Impact on profit) = (20,000 – 22,000) 000,20

000,20

= 2,000 (F)

Sales Price Variance = (Std. SP – Actual SP) AQ

(Impact on profit) = [(5 – 5) 14,000] + (5 – 4.75) 8,000]

= 2,000 (A)


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Material Statement

Given Standard

(20,000 units)

Comparable Standard

(24,000 units)

Actuals

(24,000 units)

Type Qty. Qty. Rate Amount Qty. Rate Amount

A 10,000 12,000 0.30 3,600 16,000 0.20 3,200

B 10,000 12,000 0.70 8,400 10,000 0.80 8,000

20,000 24,000 12,000 26,000 11,200

Material Price Variance = (SR – AR) AQ

A = (0.30 – 0.20) 16,000 = 1,600 (F)

B = (0.70 – 0.80) 10,000 = 1,000 (A)

600 (F)


A = (12,000 – 16,000) 0.30 = 1,200 (A)

B = (12,000 – 10,000) 0.70 = 1,400 (F)

= 200 (F)

Revised Mix

A = 000,26000,24

000,12 = 13,000 units

B = 000,26000,24

000,12 = 13,000 units

MMV = (Revised Mix – Actual Mix) SR

A = (13,000 – 16,000) 0.30 = 900 (A)

B = (13,000 – 10,000) 0.70 = 2,100 (F)

= 1,200 (F)

MYV = (TSQ – TAQ) Std. Avg. Rate

= (24,000 – 26,000) 000,24

000,12

= 1,000 (A)

Labour Statement

Given Standard

(20,000 units)

Comparable Standard

(24,000 units)

Actuals

(24,000 units)

Net Hours

Type Hrs. Hours Rate Amount Hours Rate Amount Hours

S 9,000 10,800 3 32,400 13,000 2.95 38,350 12,000

(13,000-1,000)

U 5,200 6,240 2.5 15,600 6,300 2.60 16,380 6,300

14,200 17,040 48,000 54,730 18,300

LRV = (SR – AR) AQ

Skilled = (3 – 2.95) 13,000 = 650 (F)

Unskilled = (2.5 2.6) 6,300 = 630 (A)

20(F)


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Idle Time Variance = Idle Hours SR

(Skilled) = 1,000 3 = 3,000 (A)

Net Efficiency Variance = (TSH – TAH) Std. Avg. Rate

= (17,040 – 18,300) 040,17

000,48= 3,549 (A)

Revised Mix

Skilled = 300,18040,17

800,10 = 11,599

Unskilled = 300,18040,17

240,6 = 6,701

LMV = (Revised Mix – Actual Mix) SR

Skilled = (11,599 – 12,000) 3 = 1,203 (A)

Unskilled = (6,701 – 6,300) 2.5 = 1,002.50 (F)

200.50 (A)

LMV ≅ 201 (A)

Variable Overhead Statement

Type

(20,000 units)

Comparable Standard

(24,000 units)

Actuals

(24,000 units)


20,000 24,000 0.5 12,000 24,000 0.625 15,000

VOH Expd. Variance = (SR – AR) AQ

= (0.5 – 0.625) 24,000

VOH Expd. Variance = 3,000 (A)

Note: Variable overhead statement is generally prepared for the same no. of hours for which the labour statement is prepared but in this question workers are of two types & hence the total no. of hours to be taken in the statement becomes difficulty because out of skilled & unskilled hours there may be some common hours & some uncommon hours, also information of which is not given in question. Hence, the statement is prepared by taking quantity as base instead of hours.


Particulars Standards

(1 month)

Actuals

(1 month)

Std. Calculations

Fixed Overhead 20,000 18,020 1 unit = ₹ 1

Units 20,000 24,000

Hours - -

(Two types of workers so, writing hours is not possible)

Fixed OHs Expd. Variance = Std. FOH – Actual FOH = 20,000 – 18,020

FOH Expd. Variance = 1,980 (F)

Fixed OHs Volume Variance = (SQ – AQ) Std. RR per unit = (20,000 – 24,000) 1

FOH Volume Variance = 4,000 (F)


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Reconciliation Statement reconciling the Budgeted & Actual Profit

Particulars Amount

Standard Profit 20,000


Sales Volume Variance 2,000

Sales Price Variance (2,000)

Material Price Variance 600

Material Mix Variance 1,200

Material Yield Variance (1,000)

Labour Rate Variance 20


Net Efficiency Variance (3,549)

Labour Mix Variance (201)

Variable Overhead Expd. Variance (3,000)

Fixed Overhead Expd. Variance 1,980

Fixed Overhead Volume Variance 4,000

Actual Profit 17,050

A.9. WN 1: Calculation of Raw Material Consumed (Qty.)

Particulars A B

Opening Qty. 35 40

(+) Purchases 800 1,200

(-) Closing Qty. (5) (50)

RM Consumed 830 Kgs. 1,190 Kgs.

WN 2: Calculation of Break up of Raw Material Consumed (assuming FIFO Method)

A

830 Kgs.

B

1,190 Kgs.

35 kgs. 795 kgs. 40 kgs. 1,150 kgs.

Rate ₹ 4 ₹ 4.25 ₹ 3 ₹ 2.5

(SR)

kgs. 800

3,400 Rs.

(SR)

kgs. 1,200

3,000 Rs.

Note: Since the rates for opening stock are not given in question hence their rates are assumed to be the same as the Standard Rates. (Because standard for future are normally based on past actual figures)


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Material Statement

Given Standard

(85 kgs.)

Comparable Standards

(1,700 kgs.)

Actuals

(1,700 kgs.)

Type Qty. Qty. Rate Amount Qty. Rate Amount

A 40 800 4 3,200 35 4 140

795 4.25 3,378.75

B 60 1,200 3 3,600 40 3 120

1,150 2.5 2,875

Input 100 2,000 6,800 2,020 6,513.75

(-) Loss (15%) (15) (300) - (320) -

Output 85 1,700 6,800 1,700 6,513.75

MCV = Standard Cost – Actual Cost

= (6,800 – 6,513.75)

= 286.25 (F)


A = (4 – 4.25) 795 = 198.75 (A)

B = (3 2.5) 1,150 = 575 (F)

376.25 (F)


A = (800 – 830) 4 = 120 (A)

B = (1,200 – 1,190) 3 = 30 (F)

90 (A)

Revised Standard Mix

A = 020,2000,2

800 = 808 kgs.

B = 020,2000,2

200,1 = 1,212 kgs.

MMV = (Revised SM – AM) SR

A = (808 – 830) 4 = 88 (A)

B = (1,212 – 1,190) 3 = 66 (F)

22 (A)

MYV = (TSQ – TAQ) Std. Avg. Rate = (2,000 – 2,020) 000,2

800,6= 68 (A)

Reconciliation:

MCV = MPV + MUV

= 376.25 (F) + 30 (A)

= 286.25 (F)

MUV = MMV + MYV

= 22 (A) + 68 (A)

= 90 (A)


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A.10. WN 1: Calculation of Std. Contribution per unit

= Units Standard

onContributi Standard

= units 6,000

12,00,000 - 15,00,000= ₹ 50

WN 2: Calculation of Std. Market Size

= Share Market Expected sCo.'

Qty. Sales Expected sCo.'

= 12%

6,000= 50,000 units

WN 3: Calculation of Co.’s Actual Market Share

= 100Size Market Actual

Sold Units Actual

= 10060,000

6,400 = 10.66667%

Sales Statement

Type Standards

(1 Quarter)

Actuals

(1 Quarter)

Qty. SP Amount Qty. SP Amount

- 6,000 250 15,00,000 6,400 265 16,96,000

Sales Variances (Impact on Contribution)

Market Size Variance

= [(Std. Market Size – Actual Market Size) Co.’s Std. Market Share) Std. Avg. Contribution p.u.

= [(50,000 – 60,000) 12%] 50 ₹

MSiV = 60,000 (F)

Market Share Variance

= [(Co.’s Std. Market Share – Co.’s Actual Market Share) Actual Market Size]

Std. Avg. Contribution p.u.

= [(12% - 10.66667%) 60,000] 50

MSiiV = 40,000 (A)

Sales Volume Variance = (SQ – AQ) Std. Cont. p.u.

= (6,000 – 6,400) 50 = 20,000 (F)

Sales Price Variance = (Std. SP – Actual SP) AQ

= (250 – 265) 6,400 = 96,000 (F)

Material Statement

Given Std.

(6,000 units)

Comparable Standard

(6,400 units)

Actuals

(6,400 units)


30,000 32,000 8 2,56,000 36,000 7.50 2,70,000


14

MCV = SC – AC = 2,56,000 – 2,70,000

MCV = 14,000 (A)

MPV = (SR – AR) AQ = (8 – 7.50) 36,000

MPV = 18,000 (F)

MUV = (SQ – AQ) SR = (32,000 – 36,000) 8

MUV = 32,000 (A)

Labour Statement

Given Std.

(6,000 units)

Comparable Standard

(6,400 units)

Actuals

(6,400 units)


60,000 64,000 6 3,84,000 65,000 6.4 4,16,000

6.4

4,16,000

LEV = (SH – AH) SR = (64,000 – 65,000) 6 = 6,000 (A)

LRV = (SR – AR) AH = (6 – 6.4) 65,000 = 26,000 (A)

Variable Overhead Statement

Given Std. (60,000 units)

Comparable Standard (64,000 units)

Actuals (64,000 units)


60,000 64,000 10 6,40,000 65,000 9.96923 6,48,000

10

64,000

65,000

6,48,000

VOH Exp. Variance = (SR – AR) AH = (10 – 9.96923) 65,000 = 2,000 (F)

VOH Efficiency Variance = (SH – AH) SR = (64,000 – 65,000) 10 = 10,000 (A)

Reconciliation Statement reconciling the budgeted contribution & actual contribution

Particulars Amount

Budgeted Contribution 3,00,000


Material Price Variances 18,000

Material Usage Variances (32,000)

Labour Efficiency Variance (6,000)

Labour Rate Variance (26,000)

VOH Exp. Variance 2,000

VOH Efficiency Variance (10,000)

Sales Price Variance 96,000

Market Share Variance (40,000)

Market Size Variance 60,000

Actual Profit 3,62,000

(16,96,000 – 13,34,000)

Documents

STANDARD COSTING - PRIMEprimevisionclasses.in/wp-content/uploads/2017/03/Standard-Costin… · STANDARD COSTING 3 Labour Statement Given Std. Comparable Std. Actuals (360 Std. Hours)