Standard Costing - Overheads and Sales

Question 1

How to work out Fixed overhead expenditure variance?

Answer 1

Actual overheads - (Budgeted output x OAR)

Question 2

How to work out fixed overhead volume variance?

Answer 2

Actual output x OAR - Budgeted x OAR

Question 3

How does the reconciliation statement compare from Marginal Costing to Absorption Costing?

Answer 3

Marignal only includes fixed overhead expenditure whereas Absorption includes fixed overhead expenditure and volume.

Question 4

How to work out the budgeted/standard variable cost for actual production for Absorption?

Answer 4

Actual total fixed cost figure

Question 5

How to work out the budgeted/standard variable cost for actual production for Marginal?

Answer 5

Budgeted total cost - fixed costs / budgteted production x actual production

Question 6

Name uncontrollable costs?

Answer 6

Idle Time
National minimum wage

Question 7

How does standard costing help with budgetary control?

Answer 7

Help plan and production - use variances from last period.
Help establish selling price
Plan future activity

Question 8

How to work out the sales volume variance for marginal and absoprtion?

Answer 8

Marignal:
Contirbution x Actual quantity sold
Contribution x budgeted quantity sold

Absoprtion:
Profit per unit x Actual quantity sold
Profit per unit x Budgeted quantity sold

Question 9

If actual overheads x OAR is bigger than budgeted x OAR is this a favourable or adverse variance?

Answer 9

Favourable