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    Question

    A company expected material cost to be ₹50 per unit

    for 1,000 units. Actual cost was ₹55 per unit for 950 units. What is the material cost variance?
    A ₹2,250 (A) Correct Answer Incorrect Answer
    B ₹5,000 (A) Correct Answer Incorrect Answer
    C ₹5,000 (F) Correct Answer Incorrect Answer
    D ₹2,500 (F) Correct Answer Incorrect Answer

    Solution

    Standard cost = 1,000 × ₹50 = ₹50,000 Actual cost = 950 × ₹55 = ₹52,250 Variance = ₹50,000 – ₹52,250 = ₹2,250 (A) 

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