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ACCA Skills Level Variance Analysis — practice questions

Explore 10 free Variance Analysis questions in ACCA Skills Level Management Accounting. Open each question or exercise to read its content, reference answers and available explanation.

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Variance Analysis questions and exercises with answers

Showing questions 1–10 of 10.

Sort each result by its directionRead the answer and worked solution →Match each variance to its formulaRead the answer and worked solution →Tap the wrong word in each variance ruleRead the answer and worked solution →Complete the overhead rate splitRead the answer and worked solution →What is a standard cost in variance analysis?Read the answer and worked solution →8,400 pounds of material are actually used at an actual price of $6.30 per pound. What is the total actual direct materials cost?Read the answer and worked solution →Actual direct labour is 5,100 hours at $9.50 per hour against a standard of 5,000 hours at $10.00. What is the total actual direct labour cost?Read the answer and worked solution →The actual rate is $9.50 per hour against a standard of $10.00, and 5,100 hours are actually worked. What is the direct labour rate variance?Read the answer and worked solution →Actual variable factory overhead is $39,500 and budgeted variable factory overhead for the units produced is $40,000. What is the controllable variance?Read the answer and worked solution →Gross profit at standard is $86,400 and the net variance from standard cost is $430 favourable. What is gross profit after variances?Read the answer and worked solution →

Worked practice questions

Sort each result by its direction

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Left
Favourable
Items
  1. Item
    Used 200 lb less
    Answer
    Favourable
  2. Item
    Rate $0.50 under
    Answer
    Favourable
  3. Item
    Spent $500 less
    Answer
    Favourable
  4. Item
    Ran past capacity
    Answer
    Favourable
  5. Item
    Price $0.30 over
    Answer
    Unfavourable
  6. Item
    100 extra hours
    Answer
    Unfavourable
  7. Item
    Capacity left idle
    Answer
    Unfavourable
  8. Item
    8,900 lb vs 8,600
    Answer
    Unfavourable
Right
Unfavourable
Instructions
Swipe left if the outcome is favourable, right if it is unfavourable.
_Source: Jonick, Principles of Managerial Accounting, section 8.1 Introduction_

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Match each variance to its formula

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Matching pairs
  1. Left
    Materials quantity
    Right
    (actual qty less standard qty) x std price
  2. Left
    Materials price
    Right
    (actual price less std price) x actual qty
  3. Left
    Labour time
    Right
    (actual hours less std hours) x std rate
  4. Left
    Labour rate
    Right
    (actual rate less std rate) x actual hours
  5. Left
    Overhead control
    Right
    actual variable cost less budgeted variable
  6. Left
    Overhead volume
    Right
    (normal hrs less standard hrs) x fixed rate
Instructions
Tap a variance, then tap the calculation that produces it.
_Source: Jonick, Principles of Managerial Accounting, section 8.2 Direct Materials Cost Variance_

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Tap the wrong word in each variance rule

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Questions
  1. Statement parts
    1. Using
    2. fewer
    3. pounds
    4. than
    5. standard
    6. is
    7. unfavourable
    Correction
    favourable
    Incorrect part
    unfavourable
  2. Statement parts
    1. Paying
    2. a
    3. higher
    4. price
    5. per
    6. pound
    7. than
    8. standard
    9. is
    10. favourable
    Correction
    unfavourable
    Incorrect part
    favourable
  3. Statement parts
    1. Price
    2. variance
    3. multiplies
    4. the
    5. price
    6. gap
    7. by
    8. standard
    9. quantity
    Correction
    actual
    Incorrect part
    standard
  4. Statement parts
    1. Materials
    2. quantity
    3. variance
    4. multiplies
    5. the
    6. quantity
    7. gap
    8. by
    9. actual
    10. price
    Correction
    standard
    Incorrect part
    actual
  5. Statement parts
    1. Leaving
    2. normal
    3. capacity
    4. idle
    5. gives
    6. a
    7. favourable
    8. volume
    9. variance
    Correction
    unfavourable
    Incorrect part
    favourable
Instructions
One word in each line is wrong. Tap it to put the line right.
_Source: Jonick, Principles of Managerial Accounting, section 8.4 Factory Overhead Variances_

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