240 C= 100 x 2,440 = 1,017 (approximately) 240 Material Mix Variance: Standard Price (Revised Standard Quantity - AQ) Material A: 15 P. (610-640) .15-30) = Rs. 4.50 unfavourable Material B : 20 P. (813-960) .20 (-147) = Rs. 29.40 unfavourable ) Material C:25 P. (1017 840) 25 (177) = Rs. 44.25 favourable Material Mix Variance = Rs. 10.35 favourable (V) Material Yield Variance Standard Rate (Actual Yield - Standard-Yield) Standard Cost of revised Standard mix Standard Rate = Net standard output = 50/10 = Rs. 5 Standard Yield =10/240 x 2440 = 101.67 units Yield Variance = 5 (90 - 101.67) = Rs. 58.35 unfavourable. Verification: (i) MCV=MPV+MUV 1= or -74--26-48-74 (ii) MUV = MMV+MYV or 48 = 10.35 - 58.35 = - 48 t39 Example 7.6: KSS Ltd. produces an article by blending two basic raw materials. It operates a standard costing system and the following standards have been set for raw materials: Materials Standard Mix Standard Price per kg. A 40% Rs.4.00 B 60% Rs. 3.00 The standard loss in processing is 15%. During April, 1996, the company produced, 1,700 kg, of finished output. The position of stock and purchases for the month of April, 1996 is as under: Material Stock on Stock on Purchased during 1-4-96 30-4-96 April, 1996 kg kg kg Cost Rs. A 35 5 800 3,400 B 40 50 1.200 3,000 Calculate the following variances: (1) Material Price Variance; (ii) Material Usage Variance; (iii) Material Yield Variance; (iv) Material Mix Variance; (v) Total Material Cost Variance