1)When computing standard cost variances, the difference between actual and

standard price multipled by actual quantity yields a(n): (c3 - trang 11)
a. quantity variance
b. efficiency variance
c. price variance
d. combined price and quantity variance

2) Poor quality materials could have an unfavorable effect on which of the following
variances? (c3 - trang 25, trang 33)
a. labor efficiency variance: no
material quantity variance: yes
b. labor efficiency variance: yes
material quantity variance: yes
c. labor efficiency variance: yes
material quantity variance: no
d. labor efficiency variance: no
material quantity variance: no

3) The following labor standards have been established for a particular product:
Standard labor-hours per unit of output: ……….. 2.4 hours
Standars labor rate: …….$15.45 per hour
The following data pertain to operations concerning the product for the last month:
Actual hours worked ….. 5,400 hours
Actual total labor cost…. $85,860
Actual output… 2,200 units
What is the labor rate variance for the month?

Labor rate variance

= Actual costs - FB at actual activities
= (Actual hours x Actual rate) - (Actual hours x standard rate)
= AH x (AR - SR)
85,860
= 5,400 x ( 5,400
- 15.45)
= 2,430
=> Labor rate variance > 0 => unfavorable
a. $1,908U
b. $4,282F
c. $4,284U
d. $2,430U

4)The direct labor standards for a particular product are:

4 hours of direct labor @ $12.00 per direct labor-hours = $48.00
During October, 3,350 units of this product were made, which was 150 units less than
budgeted. The labor cost incurred was $159,786 and 13,450 direct labor-hours were
worked. The direct labor variances for the month were:

159,786
labor rate variance = AH(AR - SR) = 13,450 x ( 13,450
- 12) = -1,614 < 0 => favorable
labor efficiency variance = SR(AH - SH) = 12 x(13,450 - 4 x 3,350) = 600 > 0 => unfavorable
 a. labor rate variance labor efficiency variance
$1,614U $600U
b. labor rate variance labor efficiency variance
$1,614F $600F
c. labor rate variance labor efficiency variance
$1,614U $600F
d. labor rate variance labor efficiency variance
$1,614F $600U

5)A quantity of a particular raw material was purchased for $43,250. The standard cost
of the material was $2.00 per kilogram and there was an unfavorable materials price
variance of $3,250. How many kilograms were purchased?

Materials price variance is unfavorable => MPV > 0

MPV = AQ purchase x (AP - SP)
43,250
⇔ 3,250 = AQ purchased x ( 𝐴𝑄 𝑝𝑢𝑟𝑐ℎ𝑎𝑠𝑒𝑑
- 2)
⇔ AQ purchased = 20,000

a. 23,250
b. 24,875
c. 21,625
d. 20,000

6)Victoria Corporation uses a standard costing system in which variable

manufacturing overhead is assigned to production on the basis of the number of
machine setups. The following data pertain to one month’s operations:
- Variable manufacturing overhead cost incurred: $70,000
- Total variable overhead variance: $4,550 favorable
- Standard machine setups allowed for actual production: 3,550
- Actual machine setups incurred: 3,500
The standard variable overhead rate per machine setup is:

Total VOH variance is favorable => Total variable overhead variance = - 4,550
Spending variance Efficiency variance

AQ ( AR - SR) SR ( AQ - SQ)

= 3,500 (70,000/ 3,500 - SR) = SR (3,500 - 3,550)

⇔ 3,500 (70,000/ 3,500 - SR) + SR (3,500 - 3,550) = - 4,550
⇔ SR = 21

a. $21.00
b. $20.00
c. $18.44
d. $20.30
7)Mcgahen Medical Clinic measures its activity in terms of patient-visits. Last month,
the budgeted level of activity was 1,080 patient-visits and the actual level of activity
was 990 patient-visits. The clinic's director budgets for variable overhead costs of
$3.30 per patient-visit and fixed overhead costs of $10,600 per month. The actual
variable overhead cost last month was $3,380 and the actual fixed overhead cost was
$8,780.
In the clinic's flexible budget performance report for last month, what would have
been the spending variance for the total overhead cost?

Spending variance
= Actual cost - FB at actual activities
= (3,380 + 8,780) - (variable cost budgeted + fixed cost budgeted)
= (3,380 + 8,780) - (990 x 3.3 + 10,600)
= - 1,707 < 0 => Favorable

a. $1,707F
b. $113U
c. $2,004F
d. $297F

8)Goy Corporation's flexible budget performance report for last month shows that
actual indirect materials cost, a variable overhead cost, was $28,194 and that the
variance for indirect materials cost was $1,887 unfavorable. During that month, the
company worked 11,100 machine-hoursBudgeted activity for the month had been
11,200 machine-hours. The cost formula per machine-hour for indirect materials cost
must have been closest to:

variance for indirect materials cost unfavorable=>variance for indirect materials cost = -1,887
Cost formula per machine hour for indirect material
𝐹𝑙𝑒𝑥𝑖𝑏𝑙𝑒 𝑏𝑢𝑑𝑔𝑒𝑡 𝑖𝑛𝑑𝑖𝑟𝑒𝑐𝑡 𝑚𝑎𝑡𝑒𝑟𝑖𝑎𝑙
= 𝐴𝑐𝑡𝑢𝑎𝑙 𝑎𝑐𝑡𝑖𝑣𝑖𝑡𝑦 𝑓𝑜𝑟 𝑡ℎ𝑒 𝑚𝑜𝑛𝑡ℎ
𝑣𝑎𝑟𝑖𝑎𝑏𝑙𝑒 𝑂𝐻 𝑐𝑜𝑠𝑡 + 𝑣𝑎𝑟𝑖𝑎𝑛𝑐𝑒 𝑓𝑜𝑟 𝑖𝑛𝑑𝑖𝑟𝑒𝑐𝑡 𝑚𝑎𝑡𝑒𝑟𝑖𝑎𝑙𝑠
= 𝐴𝑐𝑡𝑢𝑎𝑙 𝑎𝑐𝑡𝑖𝑣𝑖𝑡𝑦 𝑓𝑜𝑟 𝑡ℎ𝑒 𝑚𝑜𝑛𝑡ℎ
28,194 − 1,887
= 11,000
= 2.37
a. $2.35
b. $2.37
c. $2.69
d. $2.71

9) Mcgahen Medical Clinic measures its activity in terms of patient-visits. Last month,
the budgeted level of activity was 1,080 patient-visits and the actual level of activity
was 990 patient-visits. The clinic's director budgets for variable overhead costs of
$3.30 per patient-visit and fixed overhead costs of $10,600 per monthThe actual
variable overhead cost last month was $3,380 and the actual fixed overhead cost was
$8,780.
What would have been the activity variance for the total overhead cost?
Activity variance
= Flexible budgeted - planning budgeted
= (990 x 3.3 + 10,600) - (1,080 x 3.3+10,600)
= - 297 F

A. 290U
B. 297F
C. 290F
D. 297U

10) Mcgahen Medical Clinic measures its activity in terms of patient-visits. Last
month, the budgeted level of activity was 1,080 patient-visits and the actual level of
activity was 990 patient-visitsThe clinic's director budgets for variable overhead costs
of $3.30 per patient-visit and fixed overhead costs of $10,600 per month. The actual
variable overhead cost last month was $3,380 and the actual fixed overhead cost was
$8,780.
What would have been the total spending and activity variance for the total overhead
cost?
a. 2004F
b. 1636F
c. 1636U
d. 2004U

Spending variance Activity variance

= Actual OH cost- Flexible budget OH cost = Flexible budgeted - planning budgeted

= (3,380 + 8,780) - (990 x 3.3 + 10,600) = (990 x 3.3 + 10,600) - (1,080 x 3.3+10,600)
= - 1,707 F = - 297 F
Total overhead cost = - 1,707 + (-297) = -2,004 F