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Standard Costing Analysis for Siddharth Industries

Siddharth Industries operates a standard costing system. In August 2017: - Actual material cost was Rs. 189,000 for 3000 units at Rs. 52.50 per unit. - Actual direct wages were Rs. 221,000. - Actual fixed expenses were Rs. 188,000 and variable expenses were Rs. 62,000. - Standard cost per unit is Rs. 170, based on material cost of Rs. 50, direct wages of Rs. 60, fixed expenses of Rs. 40, and variable expenses of Rs. 20.

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Vikas Khurana
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8 views1 page

Standard Costing Analysis for Siddharth Industries

Siddharth Industries operates a standard costing system. In August 2017: - Actual material cost was Rs. 189,000 for 3000 units at Rs. 52.50 per unit. - Actual direct wages were Rs. 221,000. - Actual fixed expenses were Rs. 188,000 and variable expenses were Rs. 62,000. - Standard cost per unit is Rs. 170, based on material cost of Rs. 50, direct wages of Rs. 60, fixed expenses of Rs. 40, and variable expenses of Rs. 20.

Uploaded by

Vikas Khurana
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Standard costing example

Siddharth Industries Ltd operates a system of standard cost. Following information has been
compiled from its operations in Aug 2017.
Amount in Rs
Material consumed (3000 units @ Rs52.50 per unit) 1,89,000
Direct wages 2,21,000
Fixed expenses 1,88,000
Variable expenses 62,000
Output during the period was 3500 units of finished product.
During the period of operations standard production capacity was 4800 units. Break up of
standard cost per unit has been
Amount in Rs
Materials ( one unit @ Rs50) 50
Direct wages 60
Fixed expenses 40
Variable expenses 20
Total standard cost per unit 170

Standard wages per unit is based on 9600 hrs for the period @ Rs30 per hour. Hours actually
worked during the period were 6400. In addition, wages for 400 hours were paid to
compensate for idle time due to breakdown of a machine and overall wage was Rs32.50 per
hour.
Find out the following variances
a. Direct material Cost variance f. Labour efficiency variance
b. Material Price variance g. Variable expenses variance
c. Material usage variance h. Fixed expenses expenditure variance
d. Direct labour cost variance i. Fixed expenses volume variance
e. Wage rate variance j. Total cost variance

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