Standard Costing

Question 1

Standard Costing

Answer 1

Sets levels of cost / revenues which should be achievable with reasonable levels of efficiency.

Question 2

Budget

Answer 2

A financial plan for a future period of time for costs and / or revenues based on a firms objectives.

Question 3

Variance

Answer 3

The difference between budgeted and actual levels of cost / revenue.

Question 4

Sub-Variance

Answer 4

A constituent part of a total variance. Add together to get total variance.

Question 5

Adverse Variance

Answer 5

Has a negative effect on profit.

Question 6

Favourable Variance

Answer 6

Has a positive effect on profit.

Question 7

Material sub-variances

Answer 7

Material usage sub-variance

Material price sub-variance.

Question 8

Direct labour sub-variances

Answer 8

Direct labour efficiency sub-variance

Direct labour rate sub-variance.

Question 9

Flexed Budget

Answer 9

Check if actual output is different to budgeted output.
If so, replace budgeted output with actual output.
ONLY CHANGE SQ.

Question 10

Sales Sub-Variances

Answer 10

Sales Volume Sub-Variance

Sales Price Sub-Variance