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    Dec 4, 2010, 08:10 PM
    Variance
    The following information is available from Hindustan Company records for the month of September, 2010
    Material purchased: 20,000 pieces (Rs.) 80,000
    Material consumed:16,000 pieces (Rs.)
    Actual wages paid or 4,500 hours (Rs.) 2,25,000
    Factory overheads incurred (Rs.) 44,000
    Factory overheads budgeted (Rs.) 40,000
    Units produced 1,800
    Standard rates and prices are as follows:
    • Direct material rate Rs. 5 per piece.
    • Standard input 10 pieces per unit.
    • Direct labour rate Rs. 40 per hour
    • Standard requirement 2.5 hours per unit
    • Overheads Rs. 80 per labour hour.
    You are required to calculate:
    a. Material price variance
    b. Material Usage Variance
    c. Labour Rate Variance

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