Mathematics · Standard Costing and Variance Analysis
A manufacturing company has established standard costs for one of its products. The standard quantity of material required per unit is 5 kg at a standard price of ₹4 per kg. During a particular month, the company produced 1,000 units and used 5,500 kg of material at an actual price of ₹5 per kg. In addition, the standard labor time per unit is 2 hours at ₹10 per hour, but actual labor hours worked were 2,200 hours at ₹12 per hour. Which of the following statements are correct regarding variances? 1. Material Price Variance is adverse. 2. Material Usage Variance is adverse. 3. Labour Rate Variance is favourable. 4. Labour Efficiency Variance is adverse. Select the correct answer using the code below:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 11, 2, 3 and 4 only
- 21, 2 and 4 only✓
- 31 and 2 only
- 42, 3 and 4 only
Correct answer
1, 2 and 4 only
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