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