ACCA AK Management Accounting (MA) Standard Costing and Variance Analysis 2

Question 1

The fixed overhead expenditure variance compares:

Accepted Answer

Budgeted fixed overheads with actual fixed overheads

Answer

Actual fixed overheads with absorbed fixed overheads

Answer

Standard fixed overheads per unit with variable overheads per unit

Answer

Absorbed overheads with the budgeted production volume

Question 2

A company budgets to produce 1,000 units with fixed overheads of £5,000. Actual production is 900 units and actual fixed overheads are £5,000. What is the fixed overhead volume variance?

Accepted Answer

£500 adverse

Answer

£500 favourable

Answer

£4,500 favourable

Answer

Nil, as actual fixed overheads equal the budget

Question 3

The fixed overhead capacity variance measures:

Accepted Answer

The difference between actual hours worked and budgeted hours, valued at the standard rate

Answer

The difference between actual and standard fixed overhead rates per unit

Answer

The difference between standard hours for actual output and actual hours worked

Answer

The difference between actual fixed overheads and absorbed fixed overheads

Question 4

The variable overhead efficiency variance is most similar in structure to:

Accepted Answer

The direct labour efficiency variance

Answer

The fixed overhead volume variance

Answer

The direct material price variance

Answer

The sales price variance

Question 5

A company has a standard selling price of £40 per unit. Actual sales were 500 units at £38 per unit. What is the sales price variance?

Accepted Answer

£1,000 adverse

Answer

£1,000 favourable

Answer

£500 adverse

Answer

£2,000 adverse

Question 6

Under marginal costing, the sales volume variance is valued using:

Accepted Answer

Standard contribution per unit

Answer

Standard selling price per unit

Answer

Standard profit per unit

Answer

Actual contribution per unit

Question 7

Which of the following would cause a favourable direct material price variance?

Accepted Answer

Buying material at a lower price than the standard price

Answer

Using a higher grade of material than specified in the standard

Answer

Using less material than the standard quantity allows

Answer

Producing more units than budgeted during the period