B4-M7

Question 1

Material efficiency variance

Direct material quantity usage variance

Answer 1

Standard price* (Actual quantity used-Standard quality used)

Standard quantity used= units produced* standard material used per unit

Question 2

DM price variance

Answer 2

Actual quantity purchased* (Actual price- Standard price)

Question 3

DL rate variance

Answer 3

Actual hours worked* (Actual rate- Standard rate)

Question 4

DL efficiency variance

Answer 4

Standard rate* (Actual hours worked- Standard hours allowed)

Question 5

Variable overhead rate (spending variance)

Answer 5

Actual hours* (Actual rate- Standard rate)

Question 6

Remember

Answer 6

• Negative is favorable when dealing with costs
• use actual when price/ rate use standard when efficiency/ quantity
• Standard=budgeted
• Sales price variance-does not use CM

Question 7

Flexible budget variance

Answer 7

Actual performance (output) at the budgeted volume- actual costs

Question 8

Sales volume variance

Answer 8

(actual sold units-budgeted sales units)* standard contribution margin per unit

Question 9

Revenue variance/ Sales price variance

Answer 9

due to change in unit selling price

Question 10

Variable overhead effeciency variance

Answer 10

Standard rate* (Actual hours-Standard hours allowed for actual production volume)