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Material and Labour Variance Calculation for Actual Output of 800 Units

Learn to calculate material and labour variances based on standard and actual output quantity, helping in cost control and efficiency improvement in production processes.

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Material and Labour Variance Calculation for Actual Output of 800 Units

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  1. April 2008 (10 marks) From the following particulars, calculate material and labour variance

  2. Calculation of standard quantity for actual output 800*3 1000 =2400 Calculation of actual quantity: 800*3.125 =2500

  3. MCV=(SQ*SR)- (AQ*AR) =(2400*2)- (2500*2.50) =4800-6250 =-1450 (ADVERSE) MPV=(SR-AR) * AQ = (2- 2.50) * 2500 =-0.50 * 2500 = -1250 (ADVERSE) MUV= (SQ- AQ) * SR = (2400-2500) * 2 = - 100 * 2 = - 200

  4. Calculation of std hours for actual output: 800*600 1000 = 480

  5. LCV=(SH*SR) –(AH*AR) =(480*3) – (400*2.50) = 1440 – 1000 = 440 (FAVOURABLE) LEV= (SH-AH) * SR = (480-400) * 3 = 80 * 3 = 240 (FAVOURABLE) LRV= (SR-AR) * AH = (3 -2.50) * 400 = 0.5 * 400 = 200 (FAVOURABLE)

  6. THANK YOU KAVYA DIANA SPN110309

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