Standard Costing IV] Efficiency Variance: Standard Rate [Standard Time – Actual Time] Rs.10 [9, 600 3 – 25, 000] = Rs.38, 000 [F] V] Variable Overhead Variance: Standard Variable Overheads for actual production – Actual variable overheads [Rs.15 9, 600 – Rs.1, 47, 000] = Rs.3, 000 [A] VI] Fixed Overheads Cost Variance: Standard Fixed Overheads For Actual Production – Actual Fixed Overheads [Rs.25 9, 600 – Rs.2, 50, 000] = Rs.10, 000 [A] VII] Sales Price Variance: Actual Sales [Standard Sales Price – Actual Sales Price] 9, 600 units [Rs.240 – Rs.22, 80, 000/9600] = Rs.24, 000 [A] Analysis of Variances Particulars Material price
Adverse Variance Rs. 130000
Favourable Variances Rs.
Material usage Labour rate
72000 4000
Labour efficiency Variable overheads Fixed overheads Total
38000 3000 10000 147000
Sales price variance Total
24000 171000
110000
Net variance Rs.61, 000 [A] Reconciliation of Standard Profit with Actual Profits Particulars
Amount Rs.
Standard cost of 9600 units @ Rs.190
1, 82, 4000
Actual cost
18, 01, 000
Standard profit of actual production 9600 X Rs.50 Actual profits earned Variance in profits
392
4, 80, 000 4, 19, 000 61, 000 [A]