Tag: Standard Costing

The following data relates to production of a product for a month:

• quantity produced (units) – 610
• actual kilos of material used – 4,350 kgs
• standard kilos of material – 4,270 kgs
• standard cost per kilo – £9
• material price variance – £435 Favourable

What was the actual cost of material used?

Select ONE answer:

1. £38,430
2. £38,715
3. £39,150
4. £39,585

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct – £4,350 * £9 – £435
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

The cost of sales of Alex ltd comprises of direct materials and direct labour.

At the end of a trading period the following variances are calculated.

• direct materials price variance – £1,400 FAV
• direct materials usage variance – £900 ADV
• direct labour efficiency variance – £500 FAV
• direct labour rate variance – £1,200 ADV

If the actual cost of sales was £18 500, what was the standard cost of sales?

Select ONE answer:

1. £18,100
2. £18,300
3. £18,500
4. £18,700

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct – £18,500 + £1,400 – £900 + £500 – £1,200
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

The following information about the sale of a product is given:

• Budget sales volume in units – 1,000
• Budget sales revenue – £10,000
• Actual sales volume in units – 900
• Actual sales revenue – £9,900

Which of the following is true?

Select ONE answer:

1. Sales price variance – £100 ADV & Sales volume variance – £NIL
2. Sales price variance – £NIL & Sales volume variance – £100 ADV
3. Sales price variance – £900 FAV & Sales volume variance – £1,000 ADV
4. Sales price variance – £1,000 ADV & Sales volume variance – £900 FAV

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct – Sales Price Variance=(AP − SP)× Units Sold where AP=Actual selling price & SP=Standard price AND Sales volume variance = (Actual units sold – Budgeted units sold) x Budgeted price per unit. Therefore SPV = £11 – £10 * 1,000 == > £900 FAV AND SVV = 9000 – 1,000 * £10 == > £1,000 ADV
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.