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.
What is the expenditure variance of XYZ Ltd as on given month?
Rs. 1,000 (Adverse)
Budgeted fixed overhead minus actual fixed overhead is ₹30,000−₹31,000=−₹1,000. Spending exceeds budget, so the expenditure variance is ₹1,000 adverse.
Important Questions from Standard costing
- 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
Given the information in the passage, what is the calendar variance for the month?
Find the fixed-overhead capacity variance using actual hours minus ORIGINAL budgeted hours, including the calendar effect as specified in the passage.
From given information in the passage, what is the volume variance of XYZ Ltd in given month?
