In a manufacturing business, the production of products is sanding and polishing through two departments then completed. Standards for the activities of workers working in both departments and
results are shown in the following table
Departments Standard Time Standard Charge Actual Hour Actual Fee
Sanding 6,000 dis 15 TL/dis 6,500 dis 14 TL/dis
Polishing 4,500 dis 14 TL/dis 4,200 dis 14.50 TL/dis
Requested: Calculate the cost and yield deviation for both departments using the information in the table.
Solution:
a)Calculation of cost deviation(Variance)
i)Sanding Department
Cost deviation=Standard cost-Actual Cost
=(6000*15)-(6500*14)
=90,000-91000
=1000 TL(Unfavourable/Debit)
ii)Polishing Department
Cost deviation=(4500*14)-(4,200*14.50)
=63000-60900
=2100 TL(Favoorable/Credit)
b)Calculation of Yield deviation(Variance)
i)Sanding Department
Yield Deviation=(Standard hour-Actual hour)*Standard cost
=(6000-4500)*15
=22500 TL(Favourable)
ii)Polishing Department
Yield Deviation=(4500-4200)*14
=4200 TL(Favourable)
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