Problem -1(Material)

S. V. Ltd., manufactures by mixing three raw materials. For every batch of 100 kg of BXE, 125 kg of raw materials are used. In April 2012, 60 batches were prepared to produce on output of 5,600 kg of BXE. The standard and actual particulars for April, 2012 are as under.

Raw Material Mix (%) Price/ kg A B C 50 30 20 Calculate all variances.

20 10 5 Mix (%) 60 20 20 Price/ kg 21 8 6 Quantity of Raw materials purchased (kg) 5000 2000 1200

Problem -2 (Labour)

A group of workers consisting of 30 men above 30 years of age,15 female above 30 years of age, and 10 youth of age between 20 – 30 are paid standard hourly rate as follows: Males Female Youth ` ` ` 80 per hour 60 per hour 40 per hour In a normal working week of 40 hours, the group is expected to produce 200 units of output. During a week, the group consisting of 40 males, 10 females and 5 youth produced 1,600 units, they were paid wages @ ` 70 for males, ` 65 for females and ` 30 for youth per hour.

Contd…

4 hours were lost due to abnormal idle time.

Calculate: Wages variance a) Wages rate variance b) Labour efficiency variance c) Labour mix variance d) Labour idle time variance

Problem -3 (Labour)

A building can be constructed by engaging a gang of workers as per details given below, for 100 working days of each hours each.

Standard data: No. of workers in the gang Standard rate of wages/hr.

Skilled 6 ` 25 Semi-skilled 8 ` 20 Unskilled 6 ` 16

Contd…

Actual completion of the work however took 104 days of eight hour each. This includes 16 hours of stoppages due to heavy rains. The actual No. of workers engaged and the actual rates paid are given below: No. engaged Actual rate / hr.

Skilled 8 ` 30 Semi-skilled ` 6 24 Unskilled ` 6 16 Calculate the following variances: a) Labour cost variance b) Labor rate variance c) Labour efficiency variance d) Labour mixed variance e) Idle time variance