Cost Accounting

Question 1

Material quantity variance (MQV)

Answer 1

SP (SQ - AQ)

Production

Question 2

Labor rate variance (LRV)

Answer 2

AH (SR - AR)

Personnel

Question 3

Labor efficiency variance (LEV)

Answer 3

SR (SH - AH)

Production

Question 4

SQ and SH means

Answer 4

Standard allowed for actual production

Question 5

Material price variance (MPV)

Answer 5

AQ (SP - AP)

Purchasing

Question 6

One variance method

Answer 6

Net OH variance

Add the spending, efficiency and volume variances to get net

Question 7

Two variance method

Answer 7

Budget and volume

Budget = FBE @ standard - Actual

Volume = FBE @ standard - applied

Question 8

Three variance method

Answer 8

Spending, efficiency and volume

Spending = FBE @ Actual - Actual

Efficiency = FBE @ Standard - FBE @ Actual

Volume= FBE @ standard - Applied

Question 9

Four variance method

Answer 9

Is the same as the three variance method but splits spending into fixed and variable

Question 10

Company’s have the least control over which variance

Answer 10

Volume

Question 11

Spending includes

Answer 11

Fixed and variable

Question 12

Efficiency includes

Answer 12

Variable only

Question 13

Volume includes

Answer 13

Fixed only

Question 14

The four headers in variance analysis in order

Answer 14

1. Actual
2. FBE @ Actual
3. FBE @ Standard
4. Applied