Variance analysis is the process by which the total difference between standard and actual results is analyzed?

“Unforeseen discounts received” is one of the reasons for a favorable material variance?

'Theft” is one of the reasons for an adverse material variance?

'Theft” is one of the reasons for an adverse material variance?

“Use of workers at a lower rate of pay than Standard”is a reason of an adverse labour variance?

“Better quality of equipment or materials” may be a reason for a favourable labour efficiency variance?

The materials usage variance can be subdivided into a sales mix variance and a materials yield variance when more than one material is used in the product?

Calculating a mix and yield variance is only meaningful for control purposes when management is in a position to control the mix of materials used in production?

The sales volume variance can be analysed further into a sales mix variance and a sales quantity variance?

When circumstances may occur that make the original budget or standard cost invalid or inappropriate, it may be appropriate to revise a budget or standard cost?

“Planning variances” have arisen because of inaccurate planning or faulty standards?

“Operational variances” have been caused by adverse or favorable operational performance?

In a system of standard costing, idle time is an adverse labour efficiency variance, and is undesirable. But in JIT manufacturing, idle time variance should therefore be expected?

The philosophy in TQM of “right first time” may be inconsistent with a standard cost that includes an allowance for wastage

A standard cost is based on an assumption of a desirable steady state: this view is inconsistent with the principle of continuous improvement in TQM.

Performance measures may be divided into 2 types: Financial and Non-financial performance indicators?

Performance measures should only include factors which managers can control by their decisions, and for which they can be held responsible

The balanced scorecard focuses on 4 different perspectives as follows: Financial, Customer, Internal and Innovation and Learning?

Each divisional manager is responsible for the performance of the division

A profit center often includes cost center and revenue center

“A risk with target costing is that cost reductions may affect the perceived value of the product.”

A manager of a revenue center is never responsible for the cost incurred in this center

The balanced scorecard focuses on 4 different perspectives as follow: Financial, Customer, Internal and Internal and Competitor

We should use only one performance measure for one manager.

“A risk with target costing is that cost reductions may affect the perceived value of the product.”

Financial measures are typically measures relating to revenues, cost, return on capital, asset values or cash flows and service quality?

A budgetary control and variance reporting system can only motivate managers and employees to improve performance and it can’t produce undesirable negative reactions.

Idle time variance should be reported in “just in time”manufacturing?

If a company sells only one product, it is possible to analyse the overall sales volume variance into a sales mix variance and a sale quantity variance?

 “Machine breakdown” always make a favourable labour variance?

“Use of workers at a lower rate of pay than standard”is a reason of a favourable labour variance?

“More effective use made of material” one of the reasons for an adverse material variance?

“Material price increase” is one of the reasons for a favorable material variance?

The selling price variance measures the effect on expected profit of a sales volume different to the expected sales volume?

If actual results are worse than expected results, do we have a favorable variance (F)?

When actual results are better than expected results, do we have an adverse variance (A)?

Standard costing is used to value inventories, prepare cost budgets for production and provide control information (variances).

In the "Learning curve theory", the more units that a worker makes, the longer time spent for producing a unit?

Activity based budgeting is similar to traditional budgeting in the way that budgets are prepared for overhead costs ?

Rolling budgets are budgets which are continuously updated throughout a financial year , by adding a further period ( say a month or a quarter ) and removing the corresponding period that has just ended ?

In the “Learning curve theory”, the workers are likely to become more confident and knowledgeable about the work as they gain experience, to become more efficient, and to do the work more quickly?

The essence of control is “measurement of results”and “comparing” them “with the original plan”. Any “deviation from the plan” indicates that “control actions are required” to make the “results more closely with the plan”.

A standard cost is an estimated unit cost built up of standards for each cost element (standard resource price and standard resource usage)?

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