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WorksheetsQUIZ 4 : TOPIC 10 [STANDARD COSTING & VARIANCE ANALYSIS]
Total questions: 20
Worksheet time: 22mins
Ideal standards will generally result in favorable variances for the company.
True
False
A standard is a unit amount, whereas a budget is a total amount.
True
False
In developing a standard cost for direct materials, a price factor and a quantity factor must be considered.
True
False
A materials quantity variance is calculated as the difference between the standard direct materials price and the actual direct materials price multiplied by the actual quantity of direct materials used.
True
False
An unfavorable labor efficiency variance indicates that the actual number of direct labor hours worked was greater than the number of direct labor hours that should have been worked for the output attained.
True
False
Which of the following cannot be a reason of unfavorable direct materials price variance?
Excellent employee training program
Inefficient standard setting
Ineffective purchasing agent
Sudden rise price of materials
Carlo's standard quantities for 1 unit of product include 2 kg of materials and 1.5 labor hours. The standard Price are RM2 per kg and RM7 per hour. The standard overhead rate is RM8 per direct labor hour. The total standard cost of Carlo’s product is
RM14.50.
RM17.00.
RM22.50.
RM26.50.
A company developed the following standards for its product : 2 kg of direct materials at RM4 per kg. Last month, 1,500 kg of direct materials were purchased for RM5,700 and the actual unit produce was 800. The direct materials price variance for last month was
RM700 favorable.
RM300 favorable.
RM400 favorable.
RM300 unfavorable.
The standards costs per unit for direct materials are 2 gallons at RM4 per gallon. Last month, 11,200 gallons of direct materials that actually cost RM42,400 were used to produce 6,000 units of product. The direct materials quantity variance for last month was
RM3,200 favorable.
RM2,400 favorable.
RM3,200 unfavorable.
RM5,600 favorable.
The total overhead variance is the difference between the
actual overhead costs and overhead costs applied based on standard hours allowed.
actual overhead costs and overhead costs applied based on actual hours.
overhead costs applied based on actual hours and overhead costs applied based on standard hours allowed.
the actual overhead costs and the standard direct labor costs.
An unfavorable labor quantity variance may be caused by
paying workers higher wages than expected.
misallocation of workers.
worker fatigue or carelessness.
higher pay rates mandated by union contracts.
What is a standard cost?
The total number of units times the budgeted amount expected
Any amount that appears on a budget
The total amount that appears on the budget for product costs
The amount management thinks should be incurred to produce a good or service
Standard cost + price variance + quantity variance = Budgeted cost.
True
False
In concept, standards and budgets are essentially the same.
True
False
The materials price standard is based on the purchasing department's best estimate of the cost of raw materials.
True
False
Which of the following statements is true?
Variances are the differences between total actual costs and total standard costs.
When actual costs exceed standard costs, the variance is favorable.
An unfavorable variance results when actual costs are decreasing but standards are not changed.
All of the above are true
If actual direct materials costs are greater than standard direct materials costs, it means that
actual costs were calculated incorrectly.
the actual unit price of direct materials was greater than the standard unit price of direct materials.
the actual unit price of raw materials or the actual quantities of raw materials used was greater than the standard unit price or standard quantities of raw materials expected.
the purchasing agent or the production foreman is inefficient.
The standard hour for direct labor are 2, and standard rate of direct labor is RM15 per hour. If in producing 1,800 units, the actual direct labor cost was RM48,000 for 3,000 direct labor hours worked, the total direct labor variance is
RM12,000 favorable.
RM6,000 favorable.
RM6,000 unfavorable.
RM12,000 unfavorable.
The standard number of hours that should have been worked for the output attained is 6,000 direct labor hours and the actual number of direct labor hours worked was 6,300. If the direct labor rate variance was RM3,150 unfavorable, and the standard rate of pay was RM9 per direct labor hour, what was the actual rate of direct labor?
RM7.50 per direct labor hour
RM8.50 per direct labor hour
RM9.00 per direct labor hour
RM9.50 per direct labor hour
The total variance is RM35,000. The total materials variance is RM14,000. The total labor variance is twice the total overhead variance. What is the total overhead variance?
RM3,500
RM7,000
RM10,500
RM14,000
