Question 1

Direct labour efficiency variance can be expresses as:

Accepted Answer

A)  Standard hours x (actual rate - standard rate) 
B)  Standard rate x (actual hours - standard hours) 
C)  Standard rate x (actual hours + standard hours) 
D)  Actual rate x (actual hours - standard hours) 
A)  Standard hours x (actual rate - standard rate) 
B)  Standard rate x (actual hours - standard hours) 
C)  Standard rate x (actual hours + standard hours) 
D)  Actual rate x (actual hours - standard hours)

Question 2

Which of the following would be the most likely cause of an adverse material usage variance?

Accepted Answer

A)  Use of cheaper (lower quality) of materials 
B)  Having to purchase materials at short notice (and higher price) 
C)  Increase in market prices 
D)  Labour overtime 
A)  Use of cheaper (lower quality) of materials 
B)  Having to purchase materials at short notice (and higher price) 
C)  Increase in market prices 
D)  Labour overtime

Question 3

The sales margin volume variance measures the effect of a change in sales price

Accepted Answer

A) True 
 B)False

Question 4

The direct labour rate variance can be expressed as:

Accepted Answer

A)  Actual hours x (actual rate - standard rate) 
B)  Standard rate x (actual hours - standard hours) 
C)  Actual hours x (standard rate x standard hours) 
D)  Standard rate x (actual hours/standard hours) 
A)  Actual hours x (actual rate - standard rate) 
B)  Standard rate x (actual hours - standard hours) 
C)  Actual hours x (standard rate x standard hours) 
D)  Standard rate x (actual hours/standard hours)

Question 5

The Standard Cost Card for a batch of 3,000 bottles of shampoo includes the following:
36 hours in Process 1 at £6.00 per hour
4 hours in Process 2 at £9.00 per hour
A batch of 3,000 bottles had the following usage:
40 hours in Process 1 at a total cost of £260
3)5 hours in process 2 at a cost of £35.
What are the labour efficiency and rate variances for the Process 2?

Accepted Answer

A)  The Efficiency Variance is £3.50 Favourable and the Rate Variance is £4.50 Adverse 
B)  The Efficiency Variance is £4.50 Favourable and the Rate Variance is £3.50 Adverse 
C)  The Efficiency Variance is £4 Favourable and the Rate Variance is £1 Adverse 
D)  The Efficiency Variance is £4 Adverse and the Rate Variance is £5 Favourable 
A)  The Efficiency Variance is £3.50 Favourable and the Rate Variance is £4.50 Adverse 
B)  The Efficiency Variance is £4.50 Favourable and the Rate Variance is £3.50 Adverse 
C)  The Efficiency Variance is £4 Favourable and the Rate Variance is £1 Adverse 
D)  The Efficiency Variance is £4 Adverse and the Rate Variance is £5 Favourable

Direct labour efficiency variance can be expresses as:

Which of the following would be the most likely cause of an adverse material usage variance?

The sales margin volume variance measures the effect of a change in sales price

The direct labour rate variance can be expressed as:

The Statement of Financial Position Balance Sheetand What It Tells Us

The Income Statement Profit and Loss Account

The Development of Financial Reporting

Ratios and Interpretation: a Straightforward Introduction

How the Stock Market Assesses Company Performance

Cash Flow Statements: Understanding and Preparation

Advanced Interpretation of Company and Group Accounts

Current Issues in Financial Reporting

Bookkeeping to Trial Balance

Trial Balance to Final Accounts

Financing a Business

Management of Working Capital

Introduction to Management Accounting

Investment Appraisal

Budgetary Planning and Control

Absorption Costing

Marginal Costing and Decision-Making

Incomplete Records

Filters

Exam 18: Standard Costing and Variance Analysis

Direct labour efficiency variance can be expresses as:

Which of the following would be the most likely cause of an adverse material usage variance?

The sales margin volume variance measures the effect of a change in sales price

The direct labour rate variance can be expressed as:

The Statement of Financial Position Balance Sheetand What It Tells Us

The Income Statement Profit and Loss Account

The Development of Financial Reporting

Ratios and Interpretation: a Straightforward Introduction

How the Stock Market Assesses Company Performance

Cash Flow Statements: Understanding and Preparation

Advanced Interpretation of Company and Group Accounts

Current Issues in Financial Reporting

Bookkeeping to Trial Balance

Trial Balance to Final Accounts

Financing a Business

Management of Working Capital

Introduction to Management Accounting

Investment Appraisal

Budgetary Planning and Control

Absorption Costing

Marginal Costing and Decision-Making

Incomplete Records

Filters