QUIZ-VARIANCE ANALYSIS - Q

____________can be defined as a means of assessing the difference between a predetermined amount and the actual amount? 

• Variance analysis

• Investment appraisal 

• Activity based costing

• Master budgeting 

If the actual cost is lower than the standard cost then the difference would be known as: 

• unfavorable

• favorable 

• negative 

• 5. positive 

Nice Bed Enterprise uses a single raw material (fabric) in its production of bed cover. The standard price for a meter of fabric is RM7.00.  During October, Nice Bed Enterprise purchased and used 10,000 meters fabric.  The actual purchase price was RM8.00 per meter fabric.  The standard quantity required per finished bed cover is 2.8 meters.  Nice Bed Enterprise produced 3,000 finished bed covers in October.  How much was the material price variance for October? 

• RM8,400 favorable 

• RM8,400 unfavorable 

• RM10,000 unfavorable  

• RM10,000 favorable 

Modern Sdn Bhd uses 4,000 direct labour hours at a rate of RM12.00 per hour in producing a batch of display cabinet. The standard was 4,500 hours at RM12.20 per hour. Based on this data, the direct labour rate variance is: 

• RM900 favourable 

• RM900 unfavourable 

• RM800 favourable 

• RM800 unfavourable 

Frulo Sdn Bhd produced 3,000 units of output.  The production process normally requires 3 hours of labour per unit of output.  The standard labour rate is RM5.00 per hour, but Frulo Sdn Bhd paid RM6.00 per hour.  Actual hours used in completing the production process were 8,500.  How much was the labour efficiency variance? 

• RM3,000 favorable 

• RM2,500 favorable 

• RM3,000 unfavorable 

• RM2,500 unfavorable 

100. All the following statements regarding direct materials quantity variance are true, EXCEPT: 

 

1. I. the difference between the actual price and the standard price for direct materials, multiplied by the actual quantity of direct materials purchased 

2. II. the difference between the actual quantity and the standard quantity for direct materials, multiplied by the standard price 

3. III. favourable when actual direct material used is greater than the standard 

4. IV. favourable when the actual price for material is less than the standard unit price 

• I and II 

• II and III 

• I, III, and IV 

• None of the above 

 

The direct material price variance is: 

• RM61,750F 

• RM61,750U 

• RM71,500F 

• RM71,500U 

The direct material quantity variance is: 

• RM9,000F 

• RM9,000U 

• RM9,750F 

• RM9,750U 

The direct labor rate variance is: 

• RM9,000F 

• RM9,000U 

• RM9,750F 

• RM9,750U 

The direct labour efficiency (time) variance is: 

• RM21,750F 

• RM21,750U

• RM22,500F

• RM22,500U