Exam 10: Standard Costing and Variance Analysis

BCD Limited uses a standard costing system for all its products. BCD produces and sells footballs which it sells to local league football teams. Each football has a standard variable cost of £10. The standard selling price of each football is £35 and budgeted total sales for October were 800 footballs. The actual selling price for footballs throughout October was £37.50 and the actual number of footballs sold in the month was 850. The actual variable costs in October were £11.50 per football. Based on the above information, what is the sales price variance for footballs for October?

QRS Limited uses a standard costing system for all its products. QRS Limited produces Product

TST Limited uses a standard costing system for all its products. Product F has a standard selling price of £30 and budgeted total sales for the year ended 31 May 2019 of 10,000 units. The actual selling price for Product F throughout the year to 31 May 2019 was £35 and the actual units sold were 10,500. The actual variable costs of Product F amounted to £22 per unit in the year to 31 May 2019 while the standard variable cost of Product F is £20. Based on the above information, what is the sales volume variance for Product F for the year ended 31 May 2019?

A standard cost is just a best estimate of the costs and revenues associated with a product or service.

Which of the following statements does not describe variance analysis?

ZTC Limited uses a standard costing system for its products. ZTC Limited produces soft drinks. Each litre of soft drink uses 0.5 litres of fruit juice at a standard cost of £0.40 per litre. Budgeted production for June is 50,000 litres of soft drinks. Actual production for June was 55,000 litres. Total fruit juice used in June was 28,000 litres which cost £11,500. Based on the above information, what is the direct material price variance for June?

Maria bakes and sells cakes for special occasions. Each cake requires 0.5 kilograms of flour. Flour costs £1.20 per kilogram. During May, Maria expected to bake 500 cakes. However, due to additional demand, she baked 600 cakes and her total flour cost for the month was £420 for 360 kilograms. What was Maria's direct material total variance for the month of May?

Maria's bakery bakes and sells cakes for special occasions. Each cake requires 2 hours of direct labour time for baking and decorating. Variable overhead is incurred at the rate of £2.50 per labour hour. During the month of May, Maria's bakery produced 500 cakes compared to a budgeted output figure of 460 cakes. Maria's employees worked for 980 hours during May. The total variable overhead cost for May was £2,620. What was Maria's variable overhead total variance for the month of May?

The Pottery Limited uses a standard costing system for all its products. The Pottery Limited produces decorative vases. The standard direct labour time to paint one decorative vase is 2 hours and the standard cost of labour is £16 per direct labour hour. Variable overheads are allocated to each vase at the rate of £4 per labour hour. Budgeted production is 1,000 decorative vases per month with budgeted labour hours of 2,000 per month. In April, The Pottery Limited produced 1,050 decorative vases and incurred total variable overheads of £8,300. The direct labour hours paid for April were 2,025. What is the variable overhead expenditure variance for April?

Potters Limited uses a standard costing system for all its products. Potters Limited produces hand painted teapots. The standard direct labour time to paint one teapot is 1½ hours and the standard cost of labour is £20 per direct labour hour. Budgeted production is 1,500 teapots per month with budgeted monthly labour hours of 2,250. In October, Potters Limited produced 1,480 teapots and incurred total labour costs for painting the teapots of £43,659, paying £19.80 per hour for labour. What is the direct labour efficiency variance for October?

XDT Limited uses a standard costing system for all its services. XDT Limited services photocopiers. The standard direct labour time to service one photocopier is 2½ hours. Variable overhead is incurred at the rate of £5.00 per labour hour. The company budgets 750 photocopier services per month with budgeted monthly labour hours of 1,875. In September, XDT Limited serviced 800 photocopiers and paid their service engineers for a total of 1,950 labour hours. Actual variable overhead expenditure for the month was £9,550. What is the variable overhead efficiency variance for September?

ZDT Limited uses a standard costing system for all its products. ZDT Limited produces box files. The standard direct labour time to produce one box file is 5 minutes and the standard cost of labour is £10 per direct labour hour. Budgeted production is 21,000 box files per month with budgeted labour hours of 1,750 per month. In October, ZDT Limited produced 24,000 box files and total labour hours paid were 1,950. Direct labour cost for the month was £20,280. What is the direct labour rate variance for October?

The fixed overhead variance is calculated by deducting the budgeted fixed overhead expenditure from the actual fixed overhead expenditure.

ABC Limited uses a standard costing system for all its products. ABC Limited produces shirts. Each shirt uses a standard 3 metres of material at a standard cost of £5.50 per metre. Budgeted production is 5,000 shirts per annum. During the financial year ended 30 April 2019, ABC produced 5,500 shirts. The cost of each metre of material was £5.30 and 2.8 metres of material were used in each shirt produced. Based on the above information, what is the direct material total variance for the year ended 30 April 2019?

Maria runs a bakery, baking and selling cakes for special occasions. Each cake requires 2 hours of direct labour for baking and decorating. Direct labour is paid at the rate of £8 per hour. During May, Maria expected to bake 400 cakes. However, due to additional demand, she baked 500 cakes and her total labour cost for the month was £7,938 for 980 hours of direct labour. What was Maria's direct labour total variance for the month of May?

Which one of the following scenarios would not result in a favourable sales volume variance?

Which one of the following presents the correct formula for the sales price variance calculation?

Which one of the following presents the correct formula for the sales volume variance calculation?

A standard cost card includes details of standard selling price, direct materials, direct labour, direct expenses and variable overheads.

Which one of the following is not a recognized standard under standard costing?