A company produces a product X, using raw materials A and B. The standard mix of A and B is 1:1 and the standard loss is 10% of input. You are…

(a) Working for Finding – Missing Figures Cost Variance A = 0 Cost Variance (A+B) = 1,300 (A) Yield Variance (A+B) = 270 (A) Standard Cost and Actual Cost (Incomplete Information) Raw Material Standard Data Actual Data Std. Cost of Actual Qty. Qty. (Kg.) [SQ] Price (₹) [SP] Amount (₹) [SQ x SP] Qty. (Kg.) [AQ] Price (₹) [AP] Amount (₹) [AQ x AP] (₹) [AQ x SP] A 50 24 1,200 40 30 1,200 960 B 50 30 1,500 70 40 2,800 2,100 Total 100 2,700 110 4,000 3,060 Computation of Variances Material Cost Variance = Standard Cost – Actual Cost = SQ × SP - AQ × AP (A) = 1,200 - 1,200 = 0 (B) = 1,500 - 2,800 = 1,300 (A) Total = 0 +1,300 (A) = 1,300 (A) Material Price Variance = Standard Cost of Actual Quantity – Actual Cost = AQ × SP - AQ × AP Or = AQ × (SP – AP) (A) = 40 Kg. × (₹ 24.00 - 30.00) = 240 (A) (B) = 70 Kg. × (₹ 30.00 - 40.00) = 700 (A) Total = 240 (A) +700 (A) = 940 (A) Material Usage Variance = Standard Cost of Standard Quantity for Actual Output – Standard Cost of Actual Quantity = SQ × SP - AQ × SP Or = SP × (SQ – AQ) (A) = 24 × (50 Kg. – 40 Kg.) = 240 (F) (B) = 30 × (50 Kg. – 70 Kg.) = 600 (A) Total = 240 (F) +600 (A) = 360 (A) Material Mix Variance = Total Actual Quantity (units) × (Average Standard Price Per unit of Standard Mix – Average Standard Price per unit of Actual Mix) Material Yield Variance = Average Standard Price per unit of Standard Mix × [Total Standard Quantity (units) – Total Actual Quantity (units)] Standard Output = Standard Input – Standard Loss = 100 Kg. – 10 Kg. = 90 Kg. Actual Output = 90 Kg. (Actual Output and Standard Output are always equal numerically in any Material Variance Analysis)