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| 1 | |
Calculate the direct material quantity variance given the following information: Direct materials purchased | 550 kilograms | Actual purchase price | $10 per kilogram | Actual production | 1000 units | Standard quantity of direct materials allowed to produce one unit of output | 0.5 kilograms | Standard price | $9 per kilogram | Actual quantity used in production | 520 kilograms |
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| | A) | $180 unfavourable |
| | B) | $180 favourable |
| | C) | $450 unfavourable |
| | D) | $450 favourable |
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| 2 | |
The actual labour rate per hour less the standard labour rate per hour multiplied by the actual labour hours used provides the: |
| | A) | direct labour efficiency variance |
| | B) | direct labour budget variance |
| | C) | direct labour rate variance |
| | D) | direct labour effectiveness variance |
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| 3 | |
A favourable labour efficiency variance indicates that: |
| | A) | standard hours exceed actual hours |
| | B) | actual hours exceed standard hours |
| | C) | (standard direct labour rate x standard hours allowed) exceeds (actual direct labour rate x actual hours used) |
| | D) | (actual direct labour rate x actual hours used) exceeds (standard direct labour rate x standard hours allowed) |
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| 4 | |
The actual direct labour hours used less the standard labour hours allowed, given the actual output, multiplied by the standard direct labour rate per hour provides the: |
| | A) | direct labour efficiency variance |
| | B) | direct labour budget variance |
| | C) | direct labour rate variance |
| | D) | direct labour flexible budget variance |
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| 5 | |
Calculate the direct labour rate variance given the following information: Direct labour hours used | 650 | Actual direct labour rate per hour | $15 | Actual production | 1000 units | Standard quantity of direct labour hours allowed to produce one unit of output | 0.75 | Standard direct labour rate per hour | $14 |
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| | A) | $650 unfavourable |
| | B) | $650 favourable |
| | C) | $750 unfavourable |
| | D) | $750 favourable |
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| 6 | |
Calculate the direct labour efficiency variance given the following information: Direct labour hours used | 650 | Actual direct labour rate per hour | $15 | Actual production | 1000 units | Standard quantity of direct labour hours allowed to produce one unit of output | 0.75 | Standard direct labour rate per hour | $14 |
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| | A) | $650 unfavourable |
| | B) | $1400 favourable |
| | C) | $750 unfavourable |
| | D) | $750 favourable |
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| 7 | |
David McDonald, the Management Accountant employed by the Standard Manufacturing Company, is investigating only the significant cost variances for the month of December. The practice of reporting only significant cost variances is called: |
| | A) | management feedback |
| | B) | management by exception |
| | C) | responsibility management |
| | D) | benchmarking |
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| 8 | |
A firm wishing to calculate direct material price variances at the time closest to the point of responsibility will recognise the variance: |
| | A) | when the direct materials are issued to production |
| | B) | when the direct materials are used in production |
| | C) | when the direct materials are purchased |
| | D) | when the production is completed but not yet sold |
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| 9 | |
At the end of the accounting period, variance accounts are: |
| | A) | closed to the cost of goods sold |
| | B) | allocated to the raw materials inventories, work in process inventories, finished goods inventories and the cost of goods sold |
| | C) | allocated to the work in process inventories, finished goods inventories and the cost of goods sold |
| | D) | either closed to the cost of goods sold or allocated to the work in process inventories, finished goods inventories and the cost of goods sold |
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| 10 | |
In a standard costing system, the inventories are recorded at: |
| | A) | actual cost |
| | B) | allocated cost |
| | C) | standard cost |
| | D) | normal cost |
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