Standard costing

Standard costing is ...

• The total costs of the business absorbed amongst all cost units

• The cost of producing one extra unit of output

• The attribution of overheads to output on the basis of activities

• A pre-determined cost for materials, labour and overheads set in advance of production

Which department is responsible for the price of materials?

• Purchasing

• Human resources

• Production

Which department is responsible for the amount of materials used in making an item?

• Purchasing

• Human resources

• Production

Which department is responsible for setting wage rates?

• Purchasing

• Human resources

• Production

Which department is responsible for the number of hours of labour used?

• Purchasing

• Human resources

• Production

Which variance is this: AQ(SP - AP)

• Labour rate variance

• Labour efficiency variance

• Material price variance

• Material usage variance

Which variance is this: SR (SH - AH)

• Labour rate variance

• Labour efficiency variance

• Material price variance

• Material usage variance

Which variance is this: SP (SQ - AQ)

• Labour rate variance

• Labour efficiency variance

• Material price variance

• Material usage variance

Which variance is this: AH (SR - AR)

• Labour rate variance

• Labour efficiency variance

• Material price variance

• Material usage variance

Which variance is this: AQ (SP - AP)

• Labour rate variance

• Labour efficiency variance

• Sales price variance

• Sales volume variance