Standard Costing & Variance

The direct materials quantity standard would not be expressed in

• Kilogram

• RM

• Liter

• Meter

If actual costs are greater than standard costs, there is a(n)

• Normal Variance

• Favourable Variance

• Adverse Variance

• Error in the accounting system

A total direct materials variance is analyzed in terms of

• price and quantity variances.

• quantity and quality variances.

• buy and sell variances.

• tight and loose variances.

The total direct materials variance is equal to the

• materials price variance.

• product of the materials price variance and the materials quantity variance.

• difference between the materials price variance and materials quantity variance.

• 
  sum of the materials price variance and the materials quantity variance.

The investigation of direct materials price variance usually begins in the

• first production department

• 
  controller's office.

• 
  purchasing department

• 
  accounts payable department.

A formula for computing direct materials price variance is

• 
  Actual quantity purchased × (Actual rate - Standard rate)

• Actual quantity purchased × (Actual rate + Standard rate)

• 
  Standard quantity purchased × (Actual rate + Standard rate)

• 
  Standard quantity purchased × (Actual rate - Standard rate)

A favorable direct materials price variance occurs when:

• 
  actual rate of direct materials is equal to standard rate of direct materials

• 
  actual rate of direct materials is higher than standard rate of direct materials

• actual rate of direct materials is less than standard rate of direct materials

• 
  actual rate of direct materials is less than previous year's rate of direct materials

Which of the following cannot be a reason of unfavorable direct materials price variance?

• 
  Excellent employee training program

• 
  Ineffective purchasing agent

• 
  

  Inefficient standard setting

• 
  Sudden rise price of materials

Which of the following cannot be a reason of unfavorable direct materials quantity variance?

• 
  Unmotivated workers

• 
  Frequent power failures

• 
  

  Lack of supervision

• 
  Uneconomical order size

Who is the best position to influence material usage variance?

• 
  Marketing Supervisor

• 
  Production Supervisor

• 
  Store Manager

• 
  Purchasing Manager