Deck 10: Standard Costing and Variance Analysis

Question 1

Which one of the following would result in an unfavourable sales volume variance?

A) A selling price higher than budgeted.
B) A selling price lower than budgeted.
C) Selling more products or services than budgeted.
D) Selling fewer products or services than budgeted.

Answer 1

Selling fewer products or services than budgeted.

Question 2

Variances calculate the difference between actual and budgeted revenues and costs.

Answer 2

False

Question 3

Product G uses materials with a standard cost of £20 per unit of production. The results for May show an unfavourable direct material price variance of £2,400 and a favourable direct material usage variance of £1,800. Actual production during May was 3,000 units of Product

A) £55,800
B) £59,400
C) £60,600
D) £64,200

Answer 3

£60,600

Question 4

The standard cost of labour for Product Y is £15 per unit of production. The results for February show an unfavourable direct labour rate variance of £500 and a favourable direct labour efficiency variance of £700. Actual production for February was 2,500 units of Product Y. What was the actual direct labour cost of Product Y for February?

A) £37,300
B) £37,500
C) £37,700
D) £38,700

Question 5

XYZ Limited produces Product W. Product W has a standard selling price of £240 and a standard variable cost of £160. During the month of June, sales of Product W produced a favourable sales volume variance of £7,200. Budgeted contribution from sales of Product W for June was £48,000. How many units of Product W were actually sold during June?

A) 510
B) 630
C) 645
D) 690

Question 6

TJC Limited allocates a standard £5.00 fixed overhead cost to Product J on the basis that 5,000 units of Product J are produced each month. 5,500 units of Product J were produced in July resulting in an unfavourable fixed overhead expenditure variance of £1,000. What was the actual fixed overhead expenditure during July?

A) £24,000
B) £26,000
C) £26,500
D) £28,500

Question 7

Variances calculate the differences between actual and standard revenues and costs.