Standard Costing (in words)

Question 1

A flexible budget total (total standard cost) is:

Answer 1

(good output) x (input per unit of output) x (standard price of output)

Question 2

A flexible budget variance is:

Answer 2

(total actual cost) - (total standard cost)

Question 3

A price or rate variance is:

Answer 3

(difference in unit price) x (actual input)

Question 4

An efficiency or usage variance is:

Answer 4

(difference in quantity of input units) x (standard price)

Question 5

The variable overhead efficiency variance is:

Answer 5

(actual hours - standard hours) x (standard hourly rate)

Question 6

The variable overhead spending variance is:

Answer 6

(actual variable overheads - flexible budget variable overheads) - (efficiency variance)

Question 7

The fixed factory overhead volume variance is:

Answer 7

(actual activity - capacity used as allocation base) x (standard allocation rate)

Question 8

The fixed factory overhead spending variance is:

Answer 8

(actual fixed overhead) - (budgeted fixed overhead)