(a) Only (i) above {c) Only (iii) above (b) Only (ii) above 42.The labour yield variance is (d) Both (i) and (ii) above {a) (Standard production on r Ean) standard ho! (b) (Standard production on a unit) ictual hours ~ Actual production) (Average standard labour rate per (¢) (Standard hours for ac Mit) ictual production — Revised standard hours) (Standard labour rate per (d) Actual production on standard hour i's ~ Actual production) (Standard labs it 43. Wh i 2 our rate per unit) hee the variance is due to the difference between actual overhead and applied overhead itis. (@) Volume variance (b) Total overhead variance (c) Spending variance (d) Efficiency variance 14.Volume variance arises due to the differences between (@) Standard overhead applied on actual hours and overhead applied to production (b) Actual overhead and fixed budget overhead (©) Actual overhead and flexible budget based on actual hours (d) Budgeted allowance based on standard hours allowed and overhead applied to production 15. Expenditure variances arise due to the difference between (a) Standard overhead applied on ‘actual hours and overhead applied to production (b) Actual overhead and fixed budget overhead (c) Actual overhead and flexible budget based on actual hours (d) Purchase of capital equipment and budgeted capital equipment 16.Eficiency variance arises due to the differences between (@) Standard overhead applied on actual hours and ‘overhead applied to production (b) Actual overhead and fixed budget overhead (©) Actual overhead and flexible budget based on actual hours . (d) Purchase of capital equipment ‘and budgeted capital equipment 3 17.Fixed overhead cost variance is the difference perweny (@) Actual fixed cost and Budgeted ed cost (b) Actual fixed cost and Standard fixed cost (c) Actual fixed cost and Appi ie Sd a EE agence fed ovenead costs oy fixed cost and fod fied overhead costs and applied nce between eat osts variance (b) Fixed overhead expendi ure v Sotume variance {@) Fixed overhead effcloney. vara urs — Actual production) (Average standard labour rate(bandera ned overneadrate per hour (Actual hours ~ Standard hours fora 20. Fos volume variance isthe difference between _ “@) Actual quantity sold at actual price and standard qu; ny a acne (b) Actual quantity sold at actual price and standard quantity ai neni (©) Actual quantity sold at standard price and standard quantity a sense peg it i -d quantity at ac | quantity sold at standard price and standar 2 Pres hry potuces more than one produc, the sales volume variance can be divided ing (a) Sales mix variance and sales price variance (b) Sales efficiency variance and sales price variance (c) Sales mix variance and production volume variance (d) Sales quantity variance and sales mix variance 22. Which of the following is a purpose of standard costing 7 . (a) To determine profit at different levels _(b) To determine break even production level (©) To control costs (d) To allocate cost with more accuracy 23. Which of the following best describes a basic standard? (a) standard set at an ideal level, which makes no allowance for normal losses, waste and machine downtime. (©) A standard which assumes an efficient level of operation, but which includes allowances for factors such as normal loss, waste and machine downtime. (C) A standard which is kept unchanged over a period of time. (d) A standard which is based on current price levels. en (38 kgs of material ata standard cost of €2.50 per kg. The material usage variance ‘was € 280 (Favourable). The Standard usage of material for the period is (a)'4,700 kgs (b) 4,650 kgs (c) 4,600 kgs (d) 4,588, kgs 25.R Ltd. a manufacturer of Portable radios, purchases the cor assembles them into a complete radio. Each radi standard cost of & 145 per unit. Following is the result pertaining to part X for the month of December 2010 : Particulars Units : Purchases (€ 18,00,000) 12,000 Consumed in manufacturing 10,000 Radios manufactured 3,000 The material usage variance for the month of December 2010 is (a) 21,45,000 unfavourable (©) & 1,45,000 favourable (c) % 4,35,000 unfavourable (4) € 4,35,000 favourable 26.X Lid. has fumished the following data for the month of March, 2010: Particula Standard Apsaal Material cost per kg (2) 70 72 Material used (kgs) 3,500 3,420 The material price variance is ‘| (a) % 7,000 (Adverse) (©) 7,000 (Favourable) (c) € 6,840 (Adverse) (A) € 6,840 (Favourabiey 27. During the month of September 2010, 7,800 kg. of material Was purchased at E 16,980, Tho stocks of material increased by 440 kg. IIs the compen Stocks at standard purchase price. If the material price variance was, standard price per kg. of materials mMponents from subcontractors and Ho requires three units each of part X which has (b)%210 0 (d) 72.25,ree) D 000 Sirect labour hours were ao hours of production were 20880. The vere t was the labour efficiency varie wae se ) & 17,595 Ad on 24,480 cies (b) 217,595 Favourable (4) € 24,480 Favourable our cost for each unit was & 13, "labour cost for the period was €8 23%, ne What was the /abour rate variance for the period? echo, (b) € 548 favourable 81.During a period, 17,500 labour hou eae : i 17, 13 Sr er) er Serta gp ec eee (b) 19,200 ie ,7 00 (a) 18,500 82, Consider the following data pertaining to M Ltd. for the month of March 2010 : Particulars culdgie pee Variable overhead cost (@) 6,000 Bea Labour hours 500 400 Units produced : 1,500 1,470 The variable overhead efficiency variance is (@) 1,200 (Favourable) (0) ¥ 1,200 (Adverse) (c) ¥ 1,080 (Favourable) (6) € 120 (Adverse) 98-34 : X40 is one of many items produced by the manufacturing division. Its standard cost is based ‘on estimated production of 10,000 units per month. The standard cost schedule for one unit of X40 shows that 2 hours of direct labour are required at € 15 per lab. 33. The direct labour rate variance for April is (a) 20,000 Favourable (b) % 22,000 Favourable (c) € 24,000 Adverse (d) & 24,000 Favourable. - ficiency variance for April is wipe iso00 Aare (12000 Foote ie x Beene ‘Adverse (4) = 15,000 Favourable 35. ie a the following roduction department in Y Ltd. for the month of June . Consider af 2010: 28,200 ‘Actual overhead costs @) B208 ‘Standard hours for actual work oi300 Actual hours during the month eu ‘Standard overhead rate per hour @) yerhead variance is Te ot 960 (Favourable) (0) £1,750 (Adverse) rable) _(d) % 450 (Adverse) 12 following budget and actual data pertaining to product mo 2 data pertaining to ptos ostnea ae oy (Standard Hours - Actual Hours) x Standard Rate Difference between the Actual volume of output specified and the Budgeted volume of output (Budgeted Quantity - Actual Quantity) x Budgeted Sale Price 21. (Budgeted Quantity - Revised Quantity) x Budgeted Sale Price STATE WHETHER TRUE OR FALSE Estimated Cost is defined as - “a pre-determined cost which is calculated from Standards of efficient operation and the relevant necessary expenditure”. An Ideal Standard is the Standard which is “established for use unaltered for an inde which may be a long period of time”. . A Basic Standard is the Standard which is “established for use over a short period offi A Basic Standard is the Standard “which can be attained under the most favourabl Possible”. . Material Yield Variance is equal to Material Yield Variance is further (Standard Quantity - Actua! Quantity) x Standard Price. divided into (a) Materials Usage Variance; and (b) Mate Mixture Variance. Revised Standard Quantity for each input is required to be computed for calculating Yield Variance. + ppbour Cost Variance is further divided into (a) Labour Yield Variance and (0) Labour Variance 9. 10. Overheads are absorbed on the basis of Standard Overhead rate may caleulated per hour (Standard Overheads / Actual Hours), 7 Pate ISR]. Such rate may! 411. A negative Sales Value Variance is said to be tavouratn 12. Sales Quantity variance isthe diference between the Budgeted Quanm \ ee udgeted Quantity of Sales andthe) 23.2 222) = 4,650 2.50.BQ = 1,500 + 500-3 for AQ = 1,470 + 3 = 490 = 12 x (400 ~ 490) = 1,080 (F) . Actual rate is € 3,36,000 + 24,000 = & 14 per hour 24,000 x R15 - % 14) = % 24,000 Fay s{(11,000 x 2) - 24,000] x 6 = 12,000 Ady, 28,200 — (3,800 x 6.50) = 1,750 (A) 36, (11,800 ~ 12,000) x is 000 2.500(a) 12,000 817. Fixed production overhead capacity variance: (Budgeted hours — Actual hours worked) x Standard fixed overhead rate = (8,000 - 8,400) x 9 = 3,600 Favourable. 38.Actual cost = 1,44,500 Standard cost of actual production (8,500 x 15) = 1,27,500 Total overhead variance = 17,000 Adverse $9.65 x (8,400 — 8,000) = 26,000 (F) 40. Actual sales at standard selling price (9,000 x % 12.50) 1,12,500 Actual sales at actual selling price 1,17,000 Sales price variance (favourable) ie) Sinden 6) venarce Ce cee ic (4) Ideal (5) Standa riance Isage a3 iow Pein eer eas {13} effeoncy (12) Efcioncy (18) Yield Mix (16) Yield (17) Efficiency; Rate (18) Actual (19) Standard (20) Volume (21) Volume (22) Expenditure (23) Efficiency (24) Capacity (25) Volume (26) Budgeted r 23.4 (1) - (g), (2) - (A), (3) - (i), (4) - (h), (5) - (@), (6) - (0 A ) i oh, (9)- ae 4 pat et =), 42) = (u), (43) - (@), (14) - (, (15) - (0), (18) =, (17)= ), (18) -(), ( s (21) - (@) ee tec Variance. Tere Mananee Is further divided into (a) Materials Ys