XYZ Ltd provides the following data for a month. Budget:25 working days,20,000 units of output and ₹30,000 fixed overhead. Actual:27 working days,22,000 units and ₹31,000 fixed overhead. Standard time is 1.5 hours per unit, so budgeted hours are 30,000 and the fixed-overhead absorption rate is ₹1 per standard hour (₹1.50 per unit). Actual hours worked are 31,500. Assume budgeted daily capacity is constant. For the capacity-variance question use actual hours minus original budgeted hours, so that this capacity variance includes the calendar effect; the calendar variance is also asked separately as a component, not an additional amount to add to that capacity variance.
Given the information in the passage, what is the calendar variance for the month?
Rs. 2,400 (Favourable)
Budgeted hours per working day are 30,000÷25=1,200. Two additional days give 2×1,200=2,400 extra budgeted hours; at ₹1 per hour, calendar variance is ₹2,400 favourable. It is a component of the capacity variance defined in the passage.
Important Questions from Standard costing
- By reducing the sales price from Rs. 80 per unit to Rs. 78 per unit, the sales manager has succeeded in selling 1000 units more of a product. Which of the following decisive conclusions can be drawn from this?
A. Sales price variance is unfavourable
B. Sales volume variance is favourable
C. Total sales variance is unfavourable
D. Sales activity variance is Rs. 80000 (favourable)
E. Sales price variance is Rs. 2000 (unfavourable)
Choose the correct answer from the options given below: - Which one of the following is not correct with reference to standard costing ?
As per the information given below, what is the correct material yield variance ?
Standard input = 100 kg
Standard yield = 90 kg
Standard cost per kg of output = Rs. 20
Actual input = 200 kg
Actual yield = 182 kg
Actual cost per kg of output = Rs. 19
An unfavourable overhead volume variance indicates that:
Find the fixed-overhead capacity variance using actual hours minus ORIGINAL budgeted hours, including the calendar effect as specified in the passage.
