QUESTION NO. 04: Standard Costing- Variance Analysis [08 Marks]

Altamash Products Co. uses standard cost system. Following data are taken from its cost accounting records:

STANDARD ACTUAL

Raw Material Rate Per Unit Rs. 3 Rate Per Unit Rs. 3.10 Total Cost Rs. 27,000 Quantity 4,600 Units

Direct Labour Wages Per hour Rs. 5.5 Wages Per hour Rs. 5.25 Total Labour hours 5,000 Total Labour cost Rs 55,125

Factory Overhead 40% of direct labour cost Total Cost Rs. 45,000

Required:

Material Price Variance

Material Quantity Variance

Labour Wage Variance

Labour Efficiency Variance