CPA Business Environment and Concepts (BEC) : Cost Accounting Variance Formulas
Study concepts, example questions & explanations for CPA Business Environment and Concepts (BEC)
All CPA Business Environment and Concepts (BEC) Resources
Example Questions
Example Question #1 : Cost Accounting Variance Formulas
The differences between standard hours at standard wage rates and actual hours at standard wage rates is referred to as which of the following types of variances
Direct labor spending
Labor rate
Indirect labor spending
Labor usage
Labor usage
The difference between standard hours at standard wage rates and actual hours at standard rates is the labor usage/efficiency variance.
Example Question #2 : Cost Accounting Variance Formulas
Which of the following types of variances would a purchasing manager most likely influence?
Direct materials quantity
Direct labor rate
Direct materials price
Direct labor efficiency
Direct materials price
The direct materials price variance could be used to monitor purchasing manager performance.
Example Question #3 : Cost Accounting Variance Formulas
Which of the following standard costing variances would be least controllable by a production supervisor?
Material usage
Overhead efficiency
Labor efficiency
Overhead volume
Overhead volume
The overhead volume variance is a function of the budgeted amount of overhead based on standard hours. The production supervisor has little control over established standard and budgeted amounts.
Example Question #4 : Cost Accounting Variance Formulas
The only sales variance listed below that does not use contribution margin to compute results is:
Sales volume variance
Market size variance
Market share variance
Sales price variance
Sales price variance
The sales price variance does not use contribution margin.
Example Question #1 : Cost Accounting Variance Formulas
The production volume variance is due to:
]Inefficient or efficient use of direct labor hours
Difference from the planned level of the base used for overhead allocation and the actual level achieved
Efficient or inefficient use of variable overhead
A significant shift in the mix and yield of direct labor relative to the static budget
Difference from the planned level of the base used for overhead allocation and the actual level achieved
The production volume variance is due to the difference from the planned level of the based used for overhead allocation and the actual level achieved.
Example Question #6 : Cost Accounting Variance Formulas
The cost of goods manufactured would generally not include which of the following?
Overhead
Direct materials
Direct labor
Selling costs
Selling costs
Selling costs are not relevant for the goods a firm manufactures, rather this would be relevant for the cost of goods sold.
All CPA Business Environment and Concepts (BEC) Resources
