CA Inter P4 · Chapter 12 · Question 3 of 10
With the same data, the material cost variance is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) ₹800 (Favourable)
Explanation
Material cost variance = standard cost of actual output - actual cost = (8,000 kg x ₹25) - (8,300 kg x ₹24) = ₹2,00,000 - ₹1,99,200 = ₹800 Favourable. Check: price variance ₹8,300 F + usage variance ₹7,500 A = ₹800 F.
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