The standard cost card shows the following details relating to material needed to produce product QPz

Quantity of raw material required 20 Kg.

Rate of raw material OMR 3per Kg

Actual production of QPz:

Production during the month 200 Kg.

Quantity of material used 3,800 Kg.

Raw material purchased 5000 kg @ 4 per kg.

Calculate:

1. Material Cost Variance

2. Material Price Variance

3. Material Usage Variance. Also verify your answer

4. If there is 10% increase in standard material price how much impact it will create in material cost variance. 6 Marks

Q2

Material price variance - OMR 500 (F)

Standard rate of material - OMR 15

Standard quantity of raw material for actual production - 5000 Kg

Actual quantity of raw material used in actual production 5,500 Kg

Calculate material cost variance 2 Marks

Q3. Briefly explain in your own words with examples controllable variance and non controllable variance. 2 Marks