Variance Analysis

Question 1

Materials price variance =

Answer 1

AQ(AP-SP)

Question 2

Materials price variance is based on

Answer 2

amount of materials used in production

Question 3

Materials quantity variance =

Answer 3

(AQ-SQ)SP

Question 4

Favourable materials quantity variance

Answer 4

AQ < SQ

Question 5

Fault of variance goes to

Answer 5

decision maker

Question 6

Labour efficiency variance

Answer 6

(AH-SH)SR

Question 7

Variable overhead efficiency variance =

Answer 7

AH x AR - AH x SR

Question 8

Variance layout

Answer 8

1. Actual input/output = x units
2. Should cost
3. Did cost
4. Amount Variance

Question 9

Materials variance includes

Answer 9

Price and Usage

Question 10

Labour variance includes

Answer 10

Rate, Direct, Efficiency

Question 11

Labour rate variance uses

Answer 11

Hours x rate

Question 12

Materials price variance uses

Answer 12

Input quantity x cost/unit

Question 13

Materials usage variance uses

Answer 13

Output quantity x material quantity needed/unit -> variance x cost/unit

Question 14

Direct labour variance uses

Answer 14

output quantity x hours required/unit x rate

Question 15

Labour efficiency variance uses

Answer 15

actual output x hours -> hours variance x rate

Question 16

Variance report layout

Answer 16

1. Budgeted prime cost
2. Standard cost
3. Materials - price
4. Materials - usage
5. Labour - rate
6. Labour - efficiency
7. Actual cost

Question 17

Budgeted prime cost =

Answer 17

price x should unit

Question 18

Standard cost =

Answer 18

price x did unit

Question 19

Actual cost =

Answer 19

standard cost + sum of variance

Question 20

Standard contribution/unit =

Answer 20

Selling price - variable cost