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CA Final Standard Costing and Variance Analysis — practice questions — page 2

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 31–46 of 46.

In a variance report, what does a variance measure?Read the answer and worked solution →Which letter is commonly written in brackets beside a favourable variance?Read the answer and worked solution →Which pair of letters is commonly used to mark an adverse variance?Read the answer and worked solution →A variance is called adverse when actual results are what compared with expectation?Read the answer and worked solution →Into which two parts is a direct labour cost variance divided?Read the answer and worked solution →Which three variances make up the manufacturing overhead difference?Read the answer and worked solution →Besides price and rate variances, which two further variances can be calculated for inputs?Read the answer and worked solution →What is the stated purpose of analysing present cost variances?Read the answer and worked solution →Besides costs, variance analysis can also be carried out for which other item?Read the answer and worked solution →Variance analysis is a tool of budgetary control and of what other function?Read the answer and worked solution →Under standard costing, where are fixed costs of unsold goods made in a period carried forward?Read the answer and worked solution →An adverse variance exists when budget versus actual leads to what effect on profit?Read the answer and worked solution →In passive management by exception, when does the manager step in?Read the answer and worked solution →What happens in management by exception when a deviation from the norm is insignificant?Read the answer and worked solution →Variance analysis compares actual and budgeted cost of which inputs?Read the answer and worked solution →Management accounting information is computed by reference to whose needs?Read the answer and worked solution →

Worked practice questions

In a variance report, what does a variance measure?

  1. Gap from the plan
  2. Total revenue earned
  3. Cash balance held
  4. Fixed asset value
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Correct answer: A. Gap from the plan

A variance is the difference between a budgeted, planned or standard amount and the amount actually incurred or sold.

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Which letter is commonly written in brackets beside a favourable variance?

  1. U
  2. F
  3. A
  4. N
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Correct answer: B. F

Convention marks favourable variances with (F), while adverse ones are shown as (A) or (U).

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Which pair of letters is commonly used to mark an adverse variance?

  1. F or G
  2. P or L
  3. U or A
  4. R or S
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Correct answer: C. U or A

An adverse (unfavourable) variance is commonly shown as (U) or (A).

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