Case Study MEDICAL INDIA is a healthcare communication firm. They create scientific literature for doctors. Client has placed an order for scientific literature which needs to be packed in a special way. Booklet had to be tied with sateen ribbon and then in to the polythene bag. There was a standard costing for the materials as shown in figure 3. Figure 3 Sr.no Material Std cost per pcs 1 Medical writer 16 2 Designing 8 3 Printing 36 4 Packaging material 5 5 Packaging Labour 0.5 6 transport 0.75 Total 66.25
Based on the standard cost, the Selling price which was given to client Rs.73.00/- per pieces. Please find below actual costing for the production of the same input. In Figure 4. Figure 4 Act cost Sr.no Material per pcs Medical Due to unavailability of sufficient data the medical team had to buy the 1 writer 17.5 additional text book 2 Designing 8 Remains constant 3 Printing 36 Remains constant Packaging 4 material 5.5 Due to shortage of bags had to purchase at higher price Packaging 5 Labour 0.5 Remains constant As there was a delay in getting the purchase bags it had to send on urgent 6 Transport 2.5 bases due to which it had to send on courier than road transport Total 70
Therefore the variance is as followed in figure 5. Figure 5. Sr.no Material Standard cost per pcs Actual cost per pcs Variance 1 Medical writer 16 17.5 1.5 2 Designing 8 8 0 3 Printing 36 36 0 4 Packaging material 5 5.5 0.5 5 Packaging Labour 0.5 0.5 0 6 Transport 0.75 2.5 1.75 Total 66.25 70 3.75
doc_390336986.docx
Based on the standard cost, the Selling price which was given to client Rs.73.00/- per pieces. Please find below actual costing for the production of the same input. In Figure 4. Figure 4 Act cost Sr.no Material per pcs Medical Due to unavailability of sufficient data the medical team had to buy the 1 writer 17.5 additional text book 2 Designing 8 Remains constant 3 Printing 36 Remains constant Packaging 4 material 5.5 Due to shortage of bags had to purchase at higher price Packaging 5 Labour 0.5 Remains constant As there was a delay in getting the purchase bags it had to send on urgent 6 Transport 2.5 bases due to which it had to send on courier than road transport Total 70
Therefore the variance is as followed in figure 5. Figure 5. Sr.no Material Standard cost per pcs Actual cost per pcs Variance 1 Medical writer 16 17.5 1.5 2 Designing 8 8 0 3 Printing 36 36 0 4 Packaging material 5 5.5 0.5 5 Packaging Labour 0.5 0.5 0 6 Transport 0.75 2.5 1.75 Total 66.25 70 3.75
doc_390336986.docx