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Q1 Maria manufacturers gives the following details of standard cost relating to one unit of a...

Q1

Maria manufacturers gives the following details of standard cost relating to one unit of a product.

Quantity of raw material required              20 Kg.

Rate of raw material                                     OMR 8 per Kg

Actual production of QPz:

Production during the month          2000 Kg.

Quantity of material used                 40,000 Kg.

Raw material purchased                  45000 kg @ 9 per kg.

Required:

  1. Compute three variances relating to material and verify the answer.   4 Marks

  2. If there is 20% decrease in standard usage of raw material , what impact it will create in material cost variance.                                                                     2 Marks

Q2

Material price variance        -           OMR 2500 (A)

Standard rate of material     -           OMR    10

Actual rate of raw material -           OMR 15

Standard quantity of raw material for actual production            - 6,600 Kg

Actual cost of raw material used in production – OMR 100,500

Calculate material cost variance                                                                              2 Marks

Q3.

How will you explain in your own words material mix variance and material yield variance.                                                                                                                                 2 Marks

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