1. Problem – 10 (Profit Variance)(Factors contributing to change in profit) During 2012-13, average prices increased over these of the previous year: i.20% in case of sales: ii.15% in case of prime cost; and iii.10% in case of overheads. Prepare a profit variance statement from the above data. Items31.03.2012 ( ` in lakhs)30.03.2013 ( ` in lakhs) Sales120129.6 Prime cost of sales8091.1 Variable Overheads2024 Fixed Expenses1518.5 Profits54

2. Problem – 11 (Working back) NAVAYOGANA LTD., has adopted a Standard Costing System. The Standard output for a period is 20,000 units. The Standard Cost and profit per unit is given below: Particulars ` Direct Materials (6 units @ ` 1.50)9.00 Direct Labour (6 units @ ` 1.00)6.00 Direct Expenses1.00 Factory Overheads: Variable0.50 Fixed0.60 Administrative Overheads0.60 17.70 Profit per unit2.30 Selling Price (Fixed by Government)20.00

3. Contd… Actual production and sales for a period was 14,400 units. The following are the variances worked out at the end of the period: Favourable ( ` ) Adverse ( ` ) Direct Materials: Price Variance---8,500 Usage Variance2,100--- Direct Labour: Rate Variance---8,000 Efficiency Variance6,400--- Factory Overheads: Variable Expenditure Variance800--- Fixed Expenditure Variance800--- Fixed Volume Variance---3,360 Administrative Overheads: Expenditure Variance---800 Volume Variance---3,360

4. Contd… You are required to: (i)Ascertain the details of cost and prepare the Profit and Loss Account in the statement for the period, showing actual profit. (ii) Reconcile the actual profit with the standard profit.