Standard Costing and Variance Analysis

Where
(1) SRSH = Standard Cost of Standard Labour = ` 4,536
(2) SRRSH = Revised Standard Cost of Labour = ` 5,040
(3) SRAH = Standard Cost of Actual Labour = ` 4,960
(4) ARAH = Actual Cost of Labour = ` 6,960

Computation of Labour Variances:

a. Labour Sub-efficiency Variance = (1) – (2) = ` 504 (A) [`(4,536 – 5,040)]
b. Labour Mix or gang Variance = (2) – (3) = `80 (F) [`(5,040 – 4,960)]
c. Labour efficiency Variance = (1) – (3) = `424 (A) [`(4,536 – 4,960)]
d. Labour Rate Variance = (3) – (4) = `2,000 (A) [`(4,960 – 6,960)]
e. Labour Cost Variance = (1) – (4) = `2,424 (A) [`(4,536 – 6,960)]

Illustration 9
Calculate variances from the following:

STANDARD ACTUAL
INPUT MATERIAL (`)/KG TOTAL INPUT MATERIAL (`)/KG TOTAL
400 A @ 50 20,000 420 A @ 45 18,900
200 B @20 4,000 240 B @ 25 6,000
100 C @15 1,500 90 C @15 1,350
700 25,500 750 26,250
LABOUR HOURS LABOUR HOURS
100 @ ` 2 per hour 200 120 @ ` 2.50 per hour 300
200 woman @ `1.50 300 500 240 woman @ ` 1.60 384 684
25 Normal Loss 75 Actual Loss
675 26,000 675 26,934

Solution:
Calculation of Material Variances:

(1) (2) (3) (4)

SQSP (`) RSQSP (`) AQSP (`) AQAP (`)
A 428.57 x 50 420 x 50
B 214.29 x 20 240 x 20
C 107.14 x 15 90 x 15
A 20,000 21,429 21,000 18,900
B 4,000 4,289 4,800 6,000
C 1,500 1,607 1,350 1,350
` 25,500 ` 27,325 ` 27,150 ` 26,250

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RSQ for
A = 400/700 x 750 = 428.67 units
B = 200/700 x 750 = 214.29 units
C = 100/700 x 750 = 107.14 units
1. SQSP = Standard Cost of Standard Material = ` 25,500
2. RSQSP= Revised Standard Cost of Material = ` 27,325
3. AQSP= Standard Cost of Actual Material = ` 27,150
4. AQAP= Actual Cost of Material = ` 26,250
a. Material yield Variance (1-2) = ` 1,825 (A)
b. Material Mix Variance (2-3) = ` 175 (F)
c. Material usage Variance (1-3) = ` 1,650 (A)
d. Material Price Variance (3-4) = ` 900 (F)
e. Material Cost Variance (1-4) = ` 750 (A)

Calculation of Labour Variances:

(1) (2) (3)

SRSH (`) SRRSH (`) SRAH (`)
Men 2 x 107.14 2 x 120
Women 1.50 x 214.28 1.50 x 240
Men 200 214.28 240
Women 300 321.42 360
` 500 ` 536 ` 600

RSH for
Men = 100/700 x 750 = 107.14 units.
Women = 200/700 x 750 = 214.28 units.
1. SRSH = Standard Cost of Standard Labour = ` 500
2. SRRSH = Revised Standard Cost of Labour = ` 536
3. SRAH = Standard Cost of Actual Labour = ` 600
4. ARAH = Actual Cost of Labour = ` 684
a. Labour yield Variance (1-2) = ` 36 (A)
b. Labour Mix Variance (2-3) = ` 64 (A)
c. Labour efficiency Variance (1-3) = ` 100 (A)
d. Labour Rate Variance (3-4) = ` 84 (A)
e. Labour Cost Variance (1-4) = ` 184 (A)

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Illustration 10
Budgeted hours for month of March, 2012 180 Hrs.
Standard rate of article produced per hour 50 Units
Budgeted fixed overheads ` 2,700
Actual production March, 2012 9,200 Units
Actual hours for production 175 Hrs.
Actual fixed overheads ` 2,800
Calculate overhead cost, budgeted variances.

Solution:
Computation of Required Values

SRSH (1) (`) SRAH (2) (`) SRBH (3) (`) ARAH (4) (`)
15 x184 15 x 175
2,760 2,625 2,700 2,800

 Budgeted Fixed Overheads   2,700 

SR =  Budgeted Hours
=   = ` 15
   180 

Actual quantity = 9,200 units

 9,200 
Standard Hours for Actual Production =  50  =184 hours
 

Where
(1) SRSH = Standard Cost of Standard Fixed overheads = ` 2,760
(2) SRAH = Standard Cost of Actual Fixed overheads = ` 2,625
(3) SRBH = Budgeted Fixed overheads = ` 2,700
(4) ARAH = Actual Fixed overheads = ` 2,800

Computation of Fixed Overhead Variances:

a. Fixed overheads efficiency Variance = (1) – (2) = `135(F)
b. Fixed overhead capacity Variance = (2) – (3) = `75 (A)
c. Fixed overhead Volume Variance = (1) – (3) = `60 (F)
d. Fixed overhead Budget/ expenditure Variance = (3) – (4) = `100 (A)
e. Fixed overhead Cost Variance = (1) – (4) = ` 40 (A)

Illustration 11
In Dept. A the following data is submitted for the week ended 31st October:
Standard output for 40 hours per week 1,400 units
Standard fixed overhead ` 1,400

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Actual output 1,200 Units

Actual fixed overhead ` 1,500
Actual hours worked 32 Hours
Prepare a statement of variances

Solution:
Computation of Required Values

SRSH (1) (`) SRAH (2) (`) SRBH (3) (`) ARAH (4) (`)
35 × 32
 9,200 
35 ×  
 50 
1,200 1,120 1,400 1,500

 Budgeted Fixed Overheads   1,400 

SR =  =   = 35 units.
 Budgeted Hours   40 

 1,200 
SH =   = 34.29 hrs. (approx.)
 35 

Where
(1) SRSH = Standard Cost of Standard Fixed overheads = 1,200
(2) SRAH = Standard Cost of Actual Fixed overheads = 1,120
(3) SRBH = Budgeted Fixed overheads = 1,400
(4) ARAH = Actual Fixed overheads = 1,500.

Computation of Fixed Overhead Variances

a. Fixed overheads efficiency Variance = (1) – (2) = ` 80 (F)
b. Fixed overhead Capacity Variance = (2) – (3) = ` 280 (A)
c. Fixed overhead Volume Variance = (1) – (3) = `200 (A)
d. Fixed overhead Budget / expenditure Variance = (3) – (4) = `100 (A)
e. Fixed overhead Cost variance = (1) – (4) = `300 (A)

Illustration 12

Item Budget Actual

No .of working days 20 22
Output per man hour 1.0 units 0.9 units
Overhead Cost (`) 1,60,000 1,68,000
Man-hours per day 8,000 8,400

Calculate overhead Variances.

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Solution:

(1) SRSH (`) (2) SRAH (`) (3) SRRBH (`) (4) SRBH (`) (5) ARAH(`)
1 x 166320 = ` 1 x 184800 = ` 1 x 176000 = ` ` 160000 ` 168000
166320 184800 176000
Working Notes:
SR = budgeted FOH/budgeted hours = 1,60,000/1,60,000 = 1
RBH = (22/20) x 1,60,000 = 1,76,000
AH = 22 x 8,400 = 1,84,800
AQ = 1,84,800 x 0.9 = 1,66,320
SH = 1,66,320/1 = 1,66,320
1. SRSH = Standard Cost of Standard Fixed overheads = ` 1,66,320
2. SRAH = Standard Cost of Actual Fixed overheads (or)
Fixed overheads Absorbed or Recovered = ` 1,84,800
3. SRRBH = Revised Budgeted Fixed overheads = ` 1,76,000
4. SRBH = Budgeted Fixed overheads = ` 1,60,000
5. ARAH = Actual Fixed overheads = ` 1,68,000
a. FOH efficiency Variance = 1-2 = ` 18,480(A)
b. FOH Capacity Variance = 2-3 = ` 8,800(F)
c. FOH Calendar Variance = 3-4 = ` 16,000(F)
d. FOH Volume Variance = 1-4 = ` 6,320(F)
e. FOH Budget Variance = 4-5 = ` 8,000(A)
f. FOH Cost Variance = 1-5 = ` 1,680(A)

Illustration 13
A manufacturing co. operates a costing system and showed the following data in respect of the
month of November.
Actual no. of working days 22
Actual man hours worked during the month 4,300
No. of Products Produced 425
Actual overhead incurred ` 1,800

Relevant information from the company’s budget and standard cost data is as follows:
Budgeted no. of working days per month 20
Budgeted man hours per month 4,000
Standard man hours per product 10
Standard overhead rate per month per hour 50 p.
you are required to calculate the overhead variances for the month of November

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Solution:
COMPUTATION OF REQUIRED VALUES

SRSH (1) (`) SRAH (2) (`) SRRBH (3) (`) SRBH (4) (`) ARAH (5) (`)
0.5 x 4,250 0.5 x 4,300 0.5 x 4,400 0.5 x 4,000
2,125 2,150 2,200 2,000 1,800

 Budgeted Fixed Overheads   2,000 

SR =  =   = 0.50
 Budgeted Hours   4,000 

 22 
RBH =  20 × 4,000  = ` 4,400
 

SH = 425 × 10 = 4,250
Where
(1) SRSH = Standard Cost of Standard Fixed overhead = ` 2,125
(2) SRAH = Standard Cost of Actual overhead = ` 2,150
(3) SRRBH = Revised Budgeted overheads = ` 2,200
(4) SRBH = Budgeted overheads = ` 2,000
(5) ARAH = Actual overheads = ` 1,800

Computation of Required Variances

a. FOH efficiency Variance = (1) – (2) = ` 25 (A)
b. FOH Capacity Variance = (2) – (3) = ` 50 (A)
c. FOH Calendar Variance = (3) – (4) = ` 200 (F)
d. FOH Volume Variance = (1) – (4) = ` 125 (F)
e. FOH Budget Variance = (4) – (5) = ` 200 (F)
f. FOH Cost Variance = (1) – (5) = ` 325 (F)

Illustration 14
SV Ltd has furnished you the following data:

Budgeted Actual
No. of working days 25 27
Production in units 20,000 22,000
Fixed overheads (`) 30,000 31,000
Budgeted fixed OH rate is `1 per hour. In July, 2012 the actual hours worked were 31,500/hrs
Calculate the following variances:
1) Efficiency 2) Capacity 3) Calendar
4) Volume 5) expenditure 6) Total OH

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Solution:
Computation of Required Values

SRSH (1) (`) SRAH (2) (`) SRRBH (3) (`) SRBH (4) (`) ARAH (5) (`)
1 x 33,000 1 x 31,500 1 x 32,400
33,000 31,500 32,400 30,000 31,000

27
RBH = 30,000 × = 32,400 25
25

30,000 hrs
Standard time per unit = 20,000
= 1.5 hours

SH = 22,000 x 1.5 = 33,000

Using unit rate:

SRAQ (1) (`) SRSQ (2) (`) SRRBQ (3) (`) SRBQ (4) (`) ARAQ (5) (`)
1.5 × 22,000 1.5 × 21,000 1.5 × 21,600 1.5 × 20,000
33,000 31,500 32,400 30,000 31,000

B FOH's 30,000
SR = Budgeted Quantity = 20,000 = 1.5 hours

27
RBQ = 20,000 × = 21,600
25
20,000
Units in one hour = units
30,000
2
SQ = 31,500 × = 21,000
3

1. SRSH / SRAQ Standard Cost of Standard FOH’s = ` 33,000

2. SRAH / SRSQ – Standard Cost of Actual FOH’s = ` 31,500

3. SRRBH/ SRRBQ – Revised Budgeted FOH’s = ` 32,400

4. SRBH / SRBQ – Standard Fixed overheads = ` 30,000

5. ARAH/ARAQ – Actual Fixed overheads = ` 31,000

a. FOH efficiency Variance = (1) – (2) = 1,500 (F)

b. FOH Capacity Variance = (2) – (3) = 900 (A)

c. FOH Calendar Variance = (3) – (4) = 2,400 (F)

d. FOH Volume Variance = (1) – (4) = 3,000 (F)

e. FOH Budget or expensive Variance = (4) – (5) = 1,000 (A)

f. FOH Cost Variance = (1) – (5) = 2,000 (F)

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Illustration 15
A Co. manufacturing two products operates a standard costing system. The standard OH content of
each product in cost center 101 is
Product A ` 2.40 (8 direct labour hours @ 30 p. per hour)
Product B ` 1.80 (6 direct labour hours @ 30 p. per hour)
The rate of 30 p. per hour is arrived at as follows:
Budgeted OH ` 570
Budgeted Direct labour Hours `1,900
Output of product A 100 units
Output of product B 200 units
No opening or closing stock
Actual direct labour hours worked 2,320
Actual OH incurred ` 640
(a) you are required to calculate total OH for the month of October
(b) Show division into: 1) expenditure 2) Volume 3) efficiency Variances.

Solution:
Computation of Required Values

SRSH (1) (`) SRAH (2) (`) SRBH (3) (`) ARAH (4) (`)
0.3 x 2000 0.3 x 2320 0.3 × 1,900
600 696 570 640

SH = (100 x 8) + (200 x 6) = 2000 hrs

Where
(1) SRSH = Standard Cost of Standard Fixed overhead = ` 600
(2) SRAH = Standard Cost of Actual overhead = ` 696
(3) SRBH = Budgeted overheads = ` 570
(4) ARAH = Actual overheads = ` 640

Computation of Required Variances:

a. FOH efficiency Variance = (1) – (2) = 96 (A)
b. FOH Capacity Variance = (2) – (3) = 126 (F)
c. FOH Volume Variance = (1) – (3) = 30 (F)
d. FOH Budget Variance = (3) – (4) = 70 (A)
e. FOH Cost Variance = (1) – (4) = 40 (A)

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Illustration 16
The following information was obtained from the records of a manufacturing unit using standard
costing system.

Units Standard Actual

4,000 3,800
No. of working days 20 21
Fixed overheads (`) 40,000 39,000
Variable overhead (`) 12,000 12,000
You are required to calculate the following overhead variances
1) Variable OH 2) Fixed 3) a) expenditure b) Volume c) Efficiency d) Calendar.
Also prepare a reconciliation statement for the standard fixed expenses worked out at standard fixed
OH rate and actual OH.

Solution:
Computation of Required Values

SRAQ (1) (`) SRRBQ (2) (`) SRBQ (3) (`) ARAQ (4) (`)
10 x 3800 10 x 4200 10 x 4000
38000 42000 40000 39000

 Budgeted Fixed Overheads  30,000

SR =  Budgeted Units
=
20,000 = 1.5 hours
 

21
RBQ = × 4,000 = ` 4,200
20

Where

(1) SRAQ = Standard Cost of Standard Fixed overhead = ` 38,000

(2) SRRBQ = Revised Budgeted overheads = ` 42,000

(3) SRBQ = Budgeted overheads = ` 40,000

(4) ARAQ = Actual overheads = ` 39,000

Computation of Required Variances

a. FOH efficiency Variance = (1) – (2) = 4,000 (A)

b. FOH Calendar Variance = (2) – (3) = 2,000 (F)

c. FOH Volume Variance = (1) – (3) = 2,000 (A)

d. FOH Budget Variance = (3) – (4) = 1,000 (F)

e. FOH Cost Variance = (1) – (4) = 1,000 (A)

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Variable Overhead Variance = SRAQ – ARAQ

= (3 x 3,800) – 12,000
= 11,400 – 12,000
=
` 600 (A)

 Budgeted Variable Overheads  12,000

SR =  = = ` 3 per hour.
 Budgeted Hours  4,000

Illustration 17
Vinayak Ltd. has furnished you the following information for the month of August, 2012.

Budget Actual
Output (units) 30,000 32,500
Hours 30,000 33,000
Fixed OH (`) 45,000 50,000
Variable OH (`) 60,000 68,000
Working days 25 26
Calculate Variances.

Solution:

Computation of Required Values

(1) SRSH (`) (2) SRAH (`) (3) SRRBH (`) (4) SRBH (`) (5) ARAH (`)
1.5 x 32,500 1.5 x 33,000 1.5 x 31,200
48,750 49,500 46,800 45,000 50,000

 Budgeted Variable Overheads  45,000

SR =  = = ` 1.50
 Budgeted Hours  30,000

 26 
RBH =  ×30,000  = ` 31,200
 25 

Where

(1) SRSH = Standard Cost of Standard Fixed overhead = ` 48,750

(2) SRAH = Standard Cost of Actual overhead = ` 49,500

(3) SRRBH = Revised Budgeted overheads = ` 46,800

(4) SRBH = Budgeted overheads = ` 45,000

(5) ARAH = Actual overheads = ` 50,000

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Computation of Required Variances

a. FOH efficiency Variance = (1) - (2) = 750 (A)
b. FOH Capacity Variance = (2) - (3) = 2,700 (F)
c. FOH Calendar Variance = (3) - (4) = 1,800 (F)
d. FOH Volume Variance = (1) - (4) = 3,750 (F)
e. FOH Budget Variance = (4) - (5) = 5,000 (A)
f. FOH Cost Variance = (1) - (5) = 1,250 (A)

Variable Overhead Variances

Computation of Required Values

SRSH (1) (`) SRAH (2) (`) ARAH (3) (`)

2 x 32,500 2 x 33,000
65,000 66,000 68,000

 Budgeted Variable Overheads  60,000

SR =  Budgeted Hours
=
30,000 = ` 2 per unit
 

Where
(1) SRSH = Standard Cost of Variable overheads = ` 65,000
(2) SRAH = Standard Variable overhead for Actual Hours = ` 66,000
(3) ARAH = Actual Variable overhead = ` 68,000.

Computation of Required Variances:

a. Variable overhead efficiency Variance = (1) – (2) = 1,000 (A)
b. VOH Budget/ expenditure Variance = (2) – (3) = 2,000 (A)
c. VOH Cost Variance = (1) – (3) = 3,000 (A)

Illustration 18
The Cost Accountant of a Co. was given the following information regarding the OHs for Feb, 2013:
a. Overhead Cost Variance `1,400 (A)
a. Overheads Volume Variance ` 1,000 (A)
b. Budgeted Hours for Feb, 2013: 1,200 Hours
c. Budgeted OH for Feb, 2013: ` 6,000
d. Actual Rate of Recovery of OH ` 8 per hour

You are required to assist him in computing the following for Feb, 2013
1. OHs expenditure Variance
2. Actual OH’s incurred

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3. Actual Hours for Actual Production

4. OHs Capacity Variance
5. OHs efficiency Variance
6. Standard Hours for Actual Production

Solution:
Computation of Required Values

SRSH (1) (`) SRAH (2) (`) SRBH (3) (`) ARAH (4) (`)
5 x 1,000 5 x 800 5 x 1,200 8 x 800
5,000 4,000 6,000 6,400

1. SRSH - SRBH = Volume Variance

SRSH – 6,000 = 1,000

5,000
SRSH = 5,000 or SH = 5
= 1,000

2. SRSH – ARAH = Cost Variance

5,000 – ARAH = 1,400

ARAH = 6,400

a. Overhead expenditure Variance = 6,000 – 6,400 = `400 (A)

b. Actual OH’s Incurred = ` 6,400

c. Actual Hours for Actual Production = 800 hours

d. Overheads Capacity Variance = 4,000 – 6,000 = ` 2,000 (A)

e. Overheads Efficiency Variance = 5,000 – 4,000 = 1,000 (F)

f. Standard Hours for Actual Production = 1,000 hours

Illustration 19

Standard Actual
Quantity S.P. Total Quantity A.P. Total
A – 1600 24 38,400 A – 2400 20 48,000
B – 1400 18 25,200 B – 1400 18 25,200
C – 600 12 7,200 C – 750 14 10,500
D – 400 15 6,000 D – 450 14 6,300
4000 76,800 5000 90,000
From the above data calculate various sales variances

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Solution:

Material AQAP (1) (`) AQSP (2) (`) RSQSP (3) (`) SQSP (4) (`)
A 2,400 x 24 2,000 x 24
B 1,400 x 18 1,750 x 18
C 750 x 12 750 x 12
D 450 x 15 500 x 15

A 48,000 57,600 48,000 38,400

B 25,200 25,200 31,500 25,200
C 10,500 9,000 9,000 7,200
D 6,300 6,750 7,500 6,000
90,000 98,550 96,000 76,800

 SQ for that product 

RSQ =  SQ for all products  × AQ for all products
 

1,600
e.g. = × 5,000 = 2,000 units
4,000

1. AQAP = Actual Sales = ` 90,000

2. AQSP = Actual Quantity of Sales at Standard Prices = ` 98,550
3. RSQSP = Revised Standard on Budgeted Sales = ` 96,000
4. SQSP = Standard or Budgeted Sales ` 76,800
a. Sales Sub-Volume Variance 3 -4 `19,200 (F)
b. Sales Mix Variance 2–3 ` 2,550 (F)
c. Sales Volume Variance 2 -4 ` 21,750 (F)
d. Sales Price Variance 1- 2 ` 8,550 (A)
e. Sales Volume Variance 1-4 ` 13,200 (F)

Illustration 20
Budgeted and actual sales for the month of December, 2012 of two products A and B of M/s. XY Ltd.
were as follows:

Product Budgeted Units Sales Price/Unit (`) Actual Units Sales Price / Unit (`)
A 6,000 `5 5,000 5.00
1,500 4.75
B 10,000 `2 7,500 2.00
1,750 8.50
Budgeted costs for Products A and B were `4.00 and `1.50 unit respectively. Work out from the above
data the following variances.
Sales Volume Variance, Sales Value Variance, Sales Price Variance, Sales Sub Volume Variance, Sales
Mix Variance.

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Solution:

(1) (2) (3) (4)

AQAP (`) AQSP (`) RSQSP (`) SQSP (`)
A 5,000 × 5.00 6,500 × 5 5,906.25 × 5 6,000 × 5
1,500 × 4.75
B 7,500 × 2.00
1,750 × 1.90 9,250 × 2 9,843.75 × 2 10,000 × 2
A 25,000 32,500 29,531.25 30,000
7,125
B 15,000
3,325 18,500 19,687.5 20,000
`50,450 `51,000 `49,219 `50,000

Revised Standard Quantity for

A = 6,000/16,000 × 15,750 = 5,906.25 units
B = 10,000/16,000 × 15,750 = 9,843.75 units
1. AQAP = Actual Sales = `50,450
2. AQSP= Actual Quantity of Sales at Standard Price = `51,000
3. RSQSP = Revised Budgeted or Standard Sales = `49,219
4. SQSP = Standard or Budgeted Sales = `50,000
a. Sales Sub Volume or Quantity Variance = 3 – 4 = `781 (A)
b. Sales Mix Variance = 2 – 3 = `1,781 (F)
c. Sales Volume Variance = 2 – 4 = `1,000 (F)
d. Sales Price Variance = 1 – 2 = `550 (A)
e. Sales Value Variance = 1 – 4 = `450 (F)

Illustration 21

From the following particulars for a period reconcile the actual profit with the budgeted profit.

Budgeted Actual
(` lac) (` lac)
Direct Material 50.00 66.00
Direct Wages 30.00 33.00
Variable overheads 6.00 7.00
Fixed overheads 10.00 12.00
Net Profit 4.00 8.50
100.00 126.50
Actual material price and wage rates were higher by 10%. Actual sales prices are also higher by 10%.

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Solution:
(Amount in ` lac)

Sales Price Variance = 126.5 – [126.5 x 100/110] = 11.5 (F)

Sales Volume Variance = [126.5 x 100/110] – 100 = 15.0 (F)
Sales Value Variance = 126.5 – 100 = 26.5 (F)
% of Volume Increase = 15%
Material Price Variance = [66 x 100/110] – 66 = 6 (A)
Material Volume Variance = [50 x 15/100] = 7.5 (A)
Material usage Variance = [50 x 115/100] – [66 x 100/110] = 2.5 (A)
Material Cost Variance = 50 – 66 = 16 (A)
Wage Rate Variance = [33 x 100/110] – 33 = 3 (A)
Wage Volume Variance = [30 x 15/100] = 4.5 (A)
Wage efficiency Variance = [30 x 115/100] – [33 x 100/110] = 4.5 (F)
Wage Cost Variance = 30 – 33 = 3.0 (A)
Variable overhead Volume Variance = [6 x 15/100] = 0.9 (A)
Variable overheads efficiency Variance = [6 x 115/100] – 7 0.1 (A)
Variable overhead Cost Variance = 6–7= 1.0 (A)
Fixed overhead Cost Variance = 10 – 12 = 2.0 (A)

Statement showing the reconciliation of budgeted profit with actual profit

OR
Profit Variance Statement
(` in lakhs)
Budgeted Profit 4.00
Add: Sales Price Variance 11.50
Sales Volume Variance 15.00
Wage efficiency Variance 4.50 31.00
35.00
Less: Material Price Variance 6.00
Material Volume Variance 7.50
Material usage Variance 2.50
Wage Rate Variance 3.00
Wage Volume variance 4.50
Variable overhead Volume Variance 0.90
Variable overheads efficiency Variance 0.10
Fixed overhead Cost Variance 2.00 26.50
Actual Profit 8.50

THE INSTITUTE OF COST ACCOUNTANTS OF INDIA 183