Vanijya Ltd cost department stated that the standard

Solution

Solution:    
Material Cost Variance is the difference between the standard cost of direct materials specified for production and the actual cost of direct material used in production. It is given as:   (MCV) = (Standard Price × Standard Quantity) – (Actual Price × Actual Quantity)       Given:    

• Standard cost per unit = ₹10 0    

• Actual cost per unit = ₹12 0    

• Actual quantity of material used = 10 ,0 00 units   

• Actual output produced = 9 , 5 0 0 units   

• Standard Cost = ₹10 0 × 950 0 units = ₹9 , 50 ,0 0 0    

• Actual Cost = ₹12 0 × 10 ,0 00 units = ₹12, 00, 000