Question
part a) A companys Budget shows a total Material Usage requirement of 5,000 kg with a total cost of Rs. 25,000 and as per the
part a) A companys Budget shows a total Material Usage requirement of 5,000 kg with a total cost of Rs. 25,000 and as per the Budget, the company plans to produce 1,250 units using the material. At the end of the quarter, the company actually produced 1,400 units using 7,000 kg of material with a material cost of Rs. 5.5 per kg. What is the Direct Material Price Variance?
b) XYZ is engaged in manufacturing various types of PVC pipes and uses an Activity-Based Costing system. XYZs current years budget shows total overheads at Rs. 500,000. These overheads are divided into the following activities: Controlling Quality Rs. 100,000,Operating Machinery Rs. 200,000, Maintaining Machinery Rs. 50,000 and Setting-up Machinery Rs. 150,000. The following cost drivers are available: No. of Set-up - 1,875, No. of Quality inspection 5,000, Machine Hours 40,000, Maintenance Hours 1000. For each activity, identify and suggest a suitable Cost Driver.
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