In: Accounting
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:
Compute three variances relating to material and verify the answer. 4 Marks
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