E Standard costing

A unit uses 2 kg of material at a standard price of $5 a kg. 1,000 units were made. 2,100 kg were bought and used at $4.80 a kg. What is the material price variance?

• 1 $500 favourable
• 2 $500 adverse
• 3 $420 favourable
• 4 $420 adverse

A unit uses 2 kg of material at a standard price of $5 a kg. 1,000 units were made and 2,100 kg were used. What is the material usage variance?

• 1 $500 adverse
• 2 $500 favourable
• 3 $420 adverse
• 4 $80 adverse

A unit has a standard labour time of 3 hours at $10 an hour. 1,000 units took 3,100 hours at a cost of $10.30 an hour. What is the labour rate variance?

• 1 $930 favourable
• 2 $1,000 adverse
• 3 $300 adverse
• 4 $930 adverse

A unit has a standard labour time of 3 hours at $10 an hour. 1,000 units took 3,100 hours. What is the labour efficiency variance?

• 1 $930 adverse
• 2 $1,000 adverse
• 3 $1,000 favourable
• 4 $100 adverse

1,000 units were sold at $52 against a standard selling price of $50. What is the sales price variance?

• 1 $2,000 favourable
• 2 $1,000 favourable
• 3 $2,000 adverse
• 4 $52,000 favourable

Budgeted sales were 1,000 units and actual sales were 1,100. The standard profit is $8 a unit. What is the sales volume variance?

• 1 $8,800 favourable
• 2 $800 favourable
• 3 $800 adverse
• 4 $100 favourable

Budgeted fixed overheads were $50,000 and actual fixed overheads were $52,500. What is the fixed overhead expenditure variance?

• 1 $52,500 adverse
• 2 $50,000 favourable
• 3 $2,500 adverse
• 4 $2,500 favourable

Cheaper, lower grade materials are bought. Which variances are most likely?

• 1 Adverse price and usage variances
• 2 A favourable price variance and an adverse usage variance
• 3 An adverse price variance and a favourable usage variance
• 4 Favourable price and usage variances

Budgeted profit is $40,000. Favourable variances total $3,000 and adverse variances total $5,000. What is the actual profit?

• 1 $42,000
• 2 $32,000
• 3 $48,000
• 4 $38,000

Which of these is a factor to consider before investigating a variance?

• 1 Whether the cost of investigating is less than the likely benefit
• 2 Whether the variance is favourable
• 3 The size of the standard cost card
• 4 The number of workers in the factory