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CA Final Standard Costing and Variance Analysis — practice questions

Explore 46 free Standard Costing and Variance Analysis questions in CA Final Cost and Management Accounting. Open each question or exercise to read its content, reference answers and available explanation.

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Standard Costing and Variance Analysis questions and exercises with answers

Showing questions 1–30 of 46.

Standard price is Rs 10 per kg. A firm buys 500 kg at Rs 11 per kg. What is the material price variance?Read the answer and worked solution →Output was 100 units at a standard of 3 kg each at Rs 5 per kg. Actual use was 320 kg. What is the material usage variance?Read the answer and worked solution →Std time 2 hrs a unit, std rate Rs 25. 150 units took 280 hrs. Labour efficiency variance?Read the answer and worked solution →A firm paid Rs 9,600 for 800 kg of material. The standard price is Rs 11 per kg. What is the material price variance?Read the answer and worked solution →Total labour cost variance is Rs 300 favourable and the rate variance is Rs 400 adverse. What is the efficiency variance?Read the answer and worked solution →Std variable overhead Rs 4 per hour. Std hours 500, actual hours 520. Efficiency variance in Rs?Read the answer and worked solution →Actual hours 520, std rate Rs 4, actual variable overhead Rs 2,200. Spending variance in Rs?Read the answer and worked solution →Budgeted fixed overhead is Rs 12,000 for a normal 1,000 units. Only 900 units were made. What is the volume variance?Read the answer and worked solution →Budget fixed overhead Rs 12,000, actual spend Rs 12,500. Spending variance in Rs?Read the answer and worked solution →Fixed overhead spent Rs 12,500; Rs 10,800 absorbed. Under-absorption in Rs?Read the answer and worked solution →Std mix 60% A at Rs 10/kg, 40% B at Rs 20/kg. Used 50 kg each of A and B. Mix variance in Rs?Read the answer and worked solution →A firm sold 1,000 units at Rs 48 each against a budgeted price of Rs 50. What is the sales price variance?Read the answer and worked solution →Budget was 1,000 units; actual sales were 1,100. Standard margin is Rs 15 per unit. What is the sales volume variance?Read the answer and worked solution →Fixed overhead Rs 2,000 a month; 80 coaches built; variable cost Rs 400 each. Full unit cost?Read the answer and worked solution →A plant has fixed costs of Rs 6,000 and makes 30 units with variable cost of Rs 150 each. What is the full cost per unit?Read the answer and worked solution →Std 4 kg a unit at Rs 12/kg. 250 units used 1,050 kg. Usage variance in Rs?Read the answer and worked solution →2,000 m of cloth bought at Rs 14.50 a metre; std Rs 15. Price variance in Rs?Read the answer and worked solution →Paid Rs 31,200 for 1,200 hours; std wage Rs 25 an hour. Rate variance in Rs?Read the answer and worked solution →Sixty units were made in 170 hours; standard is 3 hours per unit at Rs 40 per hour. What is the efficiency variance?Read the answer and worked solution →Actual variable overhead Rs 5,000; std for actual output Rs 4,600. Total variance in Rs?Read the answer and worked solution →Budget fixed overhead Rs 20,000 for 4,000 hrs. Std hours produced 3,600. Volume variance in Rs?Read the answer and worked solution →Price variance Rs 600 adverse, usage variance Rs 150 favourable. Total material variance in Rs?Read the answer and worked solution →Actual overhead was Rs 9,000 and Rs 8,200 was absorbed into production. What was the result?Read the answer and worked solution →Which cost accounting method was introduced in the 1920s as an alternative to historical costs?Read the answer and worked solution →Traditional standard costing is used in financial statements to value which two items?Read the answer and worked solution →Traditional approaches to standard costing define cost behaviour only in terms of what?Read the answer and worked solution →Standard cost efficiencies are ratios comparing which two inputs actually used with standard conditions?Read the answer and worked solution →Standard methods still stress which efficiency, though that input is now a small share of cost?Read the answer and worked solution →Stocking up forces faster output and overruns std labour time. Which measure looks bad?Read the answer and worked solution →A coach maker normally builds 40 coaches a month with fixed costs of $1000. What overhead goes into each coach?Read the answer and worked solution →

Worked practice questions

Standard price is Rs 10 per kg. A firm buys 500 kg at Rs 11 per kg. What is the material price variance?

  1. Rs 500 favourable
  2. Rs 500 adverse
  3. Rs 550 adverse
  4. Rs 5,000 adverse
Show answer and solution

Correct answer: B. Rs 500 adverse

Price variance is actual quantity times the price gap: 500 kg x Re 1 extra = Rs 500, and paying more than standard makes it adverse.

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Output was 100 units at a standard of 3 kg each at Rs 5 per kg. Actual use was 320 kg. What is the material usage variance?

  1. Rs 100 favourable
  2. Rs 160 adverse
  3. Rs 100 adverse
  4. Rs 20 adverse
Show answer and solution

Correct answer: C. Rs 100 adverse

Standard use is 100 x 3 = 300 kg, so 20 kg excess at the standard Rs 5 gives Rs 100, adverse because more was used.

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Std time 2 hrs a unit, std rate Rs 25. 150 units took 280 hrs. Labour efficiency variance?

  1. 500 favourable
  2. 500 adverse
  3. 700 favourable
  4. 20 favourable
Show answer and solution

Correct answer: A. 500 favourable

Standard hours are 150 x 2 = 300; saving 20 hours at Rs 25 gives Rs 500 favourable.

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