CH. 10

Question 1

(Standard) Planned Cost =

Answer 1

Standard Price X Standard Quantity
( SP * SQ)

Question 2

Actual Cost =

Answer 2

Actual Price X Actual Quantity
(AP * AQ)

Question 3

Budgeted Cost =

Answer 3

Actual Quantity X Standard Price
(AQ * SP)

Question 4

Price Variance =

Answer 4

Actual Cost – Planned Cost = (AP X AQ) – (SP X SQ)

Question 5

Usage Variance=

Answer 5

Budgeted Price – Planned Cost = (AQ X SP) – (SP X SQ)

Question 6

Total Variance =

Answer 6

Actual cost – Planned cost = (AP X AQ) – (SP X SQ)

Question 7

For Price or Rate Variance Which Is Favourable?

Answer 7

AP < SP is Favorable

Question 8

For Usage or Efficiency Variance Which Is Favourable?

Answer 8

AQ < SQ is Favorable

Question 9

Material Price Variance (MPV) =

Answer 9

(Actual Price - Standard Price) x Actual Quantity aka (AP-SP) X AQ

Question 10

Material Usage Variance MUV =

Answer 10

(Actual Quantity - Standard quantity) x Standard Price aka (AQ-SQ) X SP

Question 11

Labour rateVariance (LRV) =

Answer 11

( Actual hourly wage rate - Standard hourly wage rate ) x Actual direct labour hours used
aka (AR-SR) X AH

Question 12

Labour EfficiencyVariance (LEV) =

Answer 12

(Actual direct labour hours used - Standard hours should have been used) x Standard hourly wage rate
Aka (AH-SH) X SR

Question 13

Actual Rate (AR) =