COST ACCOUNTING
STANDARD COSTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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1, 012.5
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4, 450
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4, 350
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4, 400
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Detailed explanation-1: -Formula to calculate standard costs Direct labour = employee hourly rate x no. of hours worked x total number of units. Materials cost = market price per unit x total number of units. Manufacturing overhead = fixed overhead + (variable manufacturing overhead x total number of units)
Detailed explanation-2: -Labor variance focuses specifically on working rates given the actual amount of hours worked and is calculated with the following formula: (Actual Hours x Actual Rate)-(Actual Hours x Standard Rate).
Detailed explanation-3: -Cost per unit × (Actual Output-Std. Output) = (71, 500/2, 600) × (2, 550-2, 600) = 27.5 × 50 = 1, 375 (adv) Material Usage Variance = 1, 375 (adv)+ 1, 095 (Adv) = ‘ 2, 470(Adv) (e) Credit Sales = 80-25% = 60(Rs. lakhs).
Detailed explanation-4: -LMV = (RSH-AH) x SR Where, Revised Standard Hour (RSH) = Total Actual Hour/ Total standard hour X actual hour.