ABC Ltd. had prepared the following estimation for the month of April Quantity Rate (3) Amount...

 

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ABC Ltd. had prepared the following estimation for the month of April Quantity Rate (3) Amount (3) 45.00 36.000 18,000 37,500 17,600 Material-A Material-B Skilled labour Unskilled labour 800 kg. 600 kg. 1,000 hours 800 hours 30.00 37.50 22.00 Normal loss was expected to be 10% of total input materials and an idle labour time of 5% of expected labour hours was also estimated. At the end of the month the following information has been collected from the cost accounting department: The company has produced 1,480 kg. finished product by using the followings: Rate (3) Amount (3) 43.00 38,700 32.50 21,125 35.50 42,600 23.00 19,780 Material-A Material-B Skilled labour Unskilled labour Quantity 900 kg. 650 kg. 1,200 hours 860 hours You are required to calculate: (a) Material Cost Variance; (b) Material Price Variance ABC Ltd. had prepared the following estimation for the month of April Quantity Rate (3) Amount (3) 45.00 36.000 18,000 37,500 17,600 Material-A Material-B Skilled labour Unskilled labour 800 kg. 600 kg. 1,000 hours 800 hours 30.00 37.50 22.00 Normal loss was expected to be 10% of total input materials and an idle labour time of 5% of expected labour hours was also estimated. At the end of the month the following information has been collected from the cost accounting department: The company has produced 1,480 kg. finished product by using the followings: Rate (3) Amount (3) 43.00 38,700 32.50 21,125 35.50 42,600 23.00 19,780 Material-A Material-B Skilled labour Unskilled labour Quantity 900 kg. 650 kg. 1,200 hours 860 hours You are required to calculate: (a) Material Cost Variance; (b) Material Price Variance

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To calculate the material cost variance and material price variance we need to compare the actual co... View the full answer