Following is the standard cost card of a component: Martials 2 Units at ₹ 15 ₹30 Labour 3 Hours at ₹ 20 ₹60 Total overheads 3 Hours at ₹ 10 ₹30…

Working Notes: 1. Standard hours = 10,000 × 3 = 30,000 hours The capacity is 60% So at100 % capacity the total hours would be = 30,000/ 60% = 50,000 hours Budgeted hours = 50,000 2. Budgeted Fixed Overheads = Actual Fixed overheads - Expenditure Variance(A) ₹3,00,000 – ₹50,000 = ₹ 2,50,000 3. Standard Fixed overhead rate = 2,50,000 / 50,000 = ₹ 5 per hour or ₹ 15 per unit (As time taken is 3 hrs. per unit) 4. Total Overhead rate = ₹ 10 per hour So, Variable overhead rate per hour = ₹ 10-₹5 = ₹ 5per hour or 15 per unit. 5. Labour Rate Variance = (Standard Rate per hour × Actual hours) – (Actual cost) ₹50,000 = (20 × Actual Hours – ₹ 6,50,000) Actual Hours = 35,000 (₹7,00,000/20) 1. Actual Material cost incurred: Material Cost Variance = Standard cost of Standard Quantity for Actual output – Actual cost Actual cost = Standard cost of Standard Quantity for Actual output - Material Cost Variance Material Cost Variance = ₹ 50,000(A) (10,000 units × 2 units ×₹ 15) + ₹50,000 = ₹ 3,00,000 + ₹50,000 = ₹ 3,50,000 2. Standard Cost of material consumed: Material price Variance = [Standard Price (S.P) – Actual Price (A.P)] × Actual Quantity Standard Cost of material consumed = (Actual Price (A.P) × Actual Quantity) + Material price Variance Material price Variance = ₹ 70,000(A) = 3,50,000 – 70,000 = ₹2,80,000 3. Labour Efficiency Variance [Standard Hours – Actual Hours (W. N -5)] × Standard Rate per hour (10,000× 3 - 35000) × 20 (600,000 - 7,00,000) = ₹ 1,00,000(A) 4. Variable Overhead Efficiency Variance Variable Overhead Efficiency Variance = (Standard hours for Actual Output – Actual Hours) × Standard variable rate per hour (W. N.4) (30,000 – 35,000) × 5 = ₹25000 (A) 5. Variable Overhead Expenditure Variance: Variable Overhead Expenditure Variance= (Budgeted Variable Overheads for Actual Hours) – (Actual Variable Overheads) = (5 × 35000 – ₹ 2,00,000) = ₹ 25,000(A) 6. Fixed Overhead Efficiency Variance: Fixed Overhead Efficiency Variance= (Standard hours for Actual output – Actual Hours) × Standard Fixed overhead rate per hour (30,000 -35,000) ×5 = ₹25,000(A) 7. Fixed Overhead Capacity Variance: Fixed Overhead Capacity Variance= (Actual Hours – Budgeted Hours) × Standard Fixed overhead rate per hour (35,000 -50,000) ×5 = ₹ 75,000(A) 8. Fixed Overhead Volume Variance: Fixed Overhead Volume Variance= (Actual output – Budgeted output) × Standard Fixed overhead rate per unit (10,000 - 50,000/3 hrs.) ×15 = ₹ 1,00,000(A)