Practice Test

Q1) Standard Costing is a ________. Show Answer

Q2) Standard costing is also called as _______. Show Answer

Q3) Adverse variance means when actual cost is ______ than ______. Show Answer

Q4) When standard costing are ________ whole organization gets affected. Show Answer

Q5) Formula for MPV = _______ Show Answer

Q6) Formula for LEV = _______ Show Answer

Q7) Labour variance is caused only due to change in wage rate. Show Answer

Q8) _______ variance is caused due to change in quantity. Show Answer

Q9) MCV is favorable when the _______ is less than the _______. Show Answer

Q10) Poor working condition causes the ________. Show Answer

Q11) Standard cost includes element of cost _______ cost. Show Answer

Q12) Standard costing helps the management to perform managerial function such as ________ Show Answer

Q13) Material Usage Variance = _______ Show Answer

Q14) Labour Rate Variance = ________ Show Answer

Q15) Material Variance is caused due to change in ________ Show Answer

Q16) Only large scale business can afford standard costing system. Show Answer

Q17) Standard costing is a per-determined cost which is calculated from management standard of efficient operation. Show Answer

Q18) Standard costing does not help to control cost. Show Answer

Q19) The main objective of standard costing is to ascertain cost. Show Answer

Q20) Standard cost element includes only material cost. Show Answer

Q21) Adverse variance means when actual cost are more than standard cost. Show Answer

Q22) Standard costing encourages employee to work efficiency Show Answer

Q23) Mat var is caused due to change in price, change in tax policy etc. Show Answer

Q24) Labour cost variance is favorable when standard cost is less than actual cost. Show Answer

Q25) Standard costing helps to eliminate the weaknesses of historical costing. Show Answer

Q26) If standards are in accurate, whole organization gets affected. Show Answer

Q27) With the help of standard costing cost is controlled. Show Answer

Q28) Standard costing does not help management to formulate price in advance. Show Answer

Q29) Standard costing helps to eliminate material wastage's idle time. Show Answer

Q30) The objective of standard costing is to Show Answer

Q31) A standard cost system may be used in Show Answer

Q32) An estimate of what cost should be is known as Show Answer

Q33) A standard cost is Show Answer

Q34) Which of the following best describes a basic standard? Show Answer

Q35) A standard which assumes efficient level of operations, but which includes allowance for factors such as waste and machine downtime is known as an Show Answer

Q36) What standard is based on the assumption of most favourable conditions possible? Show Answer

Q37) The standard cost card contains quantities and costs for Show Answer

Q38) Which one of the following does NOT accurately describe one of the ways in which standards are developed? Show Answer

Q39) What term can be defined as a means of assessing the difference between a predetermined amount and the actual amount? Show Answer

Q40) A total cost variance is best defined as the difference between Show Answer

Q41) If standard cost is lower than the actual cost, the difference is known as Show Answer

Q42) A favourable variance occurs when Show Answer

Q43) The "standard quantity allowed" is computed by multiplying the : Show Answer

Q44) The difference between the actual price and the standard price, multiplied by the actual quantity of materials purchased is the Show Answer

Q45) The difference between the actual quantity and the standard quantity, multiplied by the standard price is the Show Answer

Q46) Which of the following is correct with regard to using the standard quantity to compute materials variances? Standard quantity is used - Show Answer

Q47) Which of the following is correct with regard to using the standard unit price to compute materials variances? Standard unit price used: Show Answer

Q48) The term "standard hours allowed" measures Show Answer

Q49) The labour rate variance is computed as: Show Answer

Q50) If the actual number of labour hours worked is less than the standard labour hours allowed for equivalent units produced, this indicates: Show Answer

Q51) Which of the following is correct with regard to the standard labour hours being used to compute labour variances? Standard labour hours used : Show Answer

Q52) Which of the following is correct with regard to using the standard labour rate to compute labour variances? Standard labour rate used: Show Answer

Q53) What is the primary benefit of a standard costing system? Show Answer

Q54) Actual units of direct materials used were 20,000 at an actual cost of Rs. 40,000. Standard unit cost is Rs. 2.10. Assuming the materials price variance is recognized when the materials are used, the materials price variance (MPV) is: Show Answer

Q55) If material cost variance is Rs. 9,400 (favourable) and material usage variance is Rs. 8,200 (adverse), then material price variance (MPV) is Show Answer

Q56) The actual materials price (AP) was Rs. 3.50, the actual quantity (AQ) of material was 5,100 units, and the materials price variance (MPV) was Rs. 1,275 unfavourable. The standard materials price (SP) was : Show Answer

Q57) During the month of December 2013, XLNT Ltd. used 5,000 kgs of materials at a total standard cost of Rs. 20,000. The material usage variance was Rs. 360 (adverse). The standard usage of material (SQ) for the period is Show Answer

Q58) The standard units (SQ) were 5,200, the standard price (SP) was Rs. 3.25, and the materials quantity variance (MQV) was Rs. 325 favourable. The actual units (AQ) were: Show Answer

Q59) Last month 27,000 direct labour hours were worked at an actual cost of Rs. 2,36,385 and the standard direct labour hours of production were 29,880. The standard direct labour cost per hour was Rs. 8.50. What was the labour efficiency variance (LEV)? Show Answer

Q60) Consider the following data pertaining to Roy Ltd. For the month of June 2014:
Actual direct labour hours - 27,600
Standard direct labour hours - 28,000
Total direct labour cost (Rs.) - 1,93,200
If direct labour efficiency variance is Rs. 2,560 (favourable), the direct labour rate variance (LRV) is Show Answer

Q61) The standard hourly rate was Rs. 1.40. The actual rate was Rs. 1.30. The labour rate variance was Rs. 600, favourable. The actual labour hours (AH) were: Show Answer

Q62) Estimated Cost is defined as - "a pre-determined cost which is calculated from management's standards of efficient operation and the relevant necessary expenditure". Show Answer

Q63) An Ideal Standard is the Standard which is "established for use unaltered for an indefinite period which may be a long period of time". Show Answer

Q64) A Basic Standard is the Standard which is "established for use over a short period of time". Show Answer

Q65) A Basic Standard is the Standard "which can be attained under the most favourable conditions possible". Show Answer

Q66) Labour Cost Variance is further divided into
(a) Labour Yield Variance and
(b) Labour Rate Variance. Show Answer

Q67) Standard Costing helps to know "what the cost will be." Show Answer

Q68) Variance Analysis is part of Marginal Costing. Show Answer

Q69) Standards for the same activity are the same for different firms. Show Answer

Q70) Standard cost can be used for valuation of stock and work-in-progress. Show Answer

Q71) The main purpose of standard costing is cost control. Show Answer

Q72) Comparison of actual results with an Ideal Standard would result in large unfavourable variances. Show Answer

Q73) Standard Cost is nothing but average cost as per the cost records for past years. Show Answer

Q74) All variances are expressed in monetary terms only. Show Answer

Q75) If the standard cost is lower than the actual cost, the variance is Favourable. Show Answer

Q76) Total Cost Variances are calculated based on budgeted sales level. Show Answer

Q77) Quantity variance and price variance are synonymous terms. Show Answer

Q78) A standard price is the price that should be paid per unit of output. Show Answer

Q79) Standard Price is used while computing all Material Cost Variances. Show Answer

Q80) Standard Quantity is used while computing all Material Cost Variances. Show Answer

Q81) Standard Quantity is not used while computing Material Price Variances. Show Answer

Q82) Actual Quantity is used while computing ail Material Cost Variances. Show Answer

Q83) Actual Price is used while computing ail Material Cost Variances. Show Answer

Q84) Actual Price is used while computing Material Usage Variances. Show Answer

Q85) Standard Rate is used while computing all Labour Cost Variances. Show Answer

Q86) Standard Hour is used while computing alt Labour Cost Variances. Show Answer

Q87) Standard Hour is not used while computing Labour Rate Variances. Show Answer

Q88) Actual Hour is used while computing all Labour Cost Variances. Show Answer

Q89) Actual Rate is used while computing all Labour Cost Variances. Show Answer

Q90) Actual Rate is used while computing Labour Efficiency Variances. Show Answer