Question 1

BFM Limited uses a standard costing system for all its products. BFM Limited produces Product C. The standard material usage for Product C is 3 kilograms of material at a cost of £5 per kilogram. Budgeted production for Product C is 4,000 units per annum. During the financial year ended 28 February 2020, BFM produced 4,500 Product Cs using a total of 12,600 kilograms of material at a cost of £5.50 per kilogram. Based on the above information, what is the direct material usage variance for the year ended 28 February 2020?
A) £1,800 Unfavourable
B) £4,000 Favourable
C) £4,500 Favourable
D) £6,300 Unfavourable

Accepted Answer

C

Question 2

BTG Limited uses a standard costing system for all its products. BTG Limited produces Product D. The standard material usage for Product D is 5 kilograms of material at a cost of £10 per kilogram. Budgeted production for Product D is 10,000 units per annum. During the financial year ended 31 March 2020, BTG produced 11,000 product Ds using a total of 57,500 kilograms of material at a cost of £9.75 per kilogram. Based on the above information, what is the direct material usage variance for the year ended 31 March 2020?
A) £10,625 Unfavourable
B) £13,750 Favourable
C) £14,375 Favourable
D) £25,000 Unfavourable

Accepted Answer

D

Question 3

QRS Limited uses a standard costing system for all its products. QRS Limited produces Product E. The standard direct labour hours for one unit of Product E are 3 hours at £11 per direct labour hour. Budgeted production of Product E is 4,000 units per annum. In the financial year ended 31 October 2019, QRS Limited produced 3,950 units of Product E. Total direct labour cost for the year was £132,000 with direct labour hours paid at a rate of £12.00 per hour. What is the direct labour efficiency variance for Product E for the financial year ended 31 October 2019?
A) £Nil
B) £1,650 unfavourable
C) £9,350 Favourable
D) £11,000 Unfavourable

Accepted Answer

C

Question 4

QRS Limited uses a standard costing system for all its products. QRS Limited produces Product D. The standard direct labour hours for Product D are 2½ hours at £8 per direct labour hour. Budgeted production of Product D is 3,000 units per annum. In the financial year ended 31 October 2019, QRS Limited produced 3,500 units of Product D. Total direct labour cost for the year was £79,800 at a rate of £7.60 per hour. What is the direct labour rate variance for Product D for the financial year ended 31 October 2019?
A) £3,600 Favourable
B) £4,200 Favourable
C) £9,800 Unfavourable
D) £14,000 Unfavourable

Accepted Answer

The answer of QRS Limited uses a standard costing system...

Question 5

QRS Limited uses a standard costing system for all its products. QRS Limited produces Product E. The standard machine hours for each unit of Product E are 3½ hours. Variable overhead is incurred by each Product E at the rate of £8 per machine hour. Budgeted production of Product E is 3,000 units per annum. In the financial year ended 31 October 2019, QRS Limited produced 3,300 units of Product E. Total machine hours for the year were 11,800 and the variable overhead paid in the year was £95,000. What is the variable overhead expenditure variance for Product E for the financial year ended 31 October 2019?
A) £600 Unfavourable
B) £2,000 Unfavourable
C) £2,600 Unfavourable
D) £8,400 Unfavourable

Accepted Answer

The answer of QRS Limited uses a standard costing system...

Quiz 3: Standard Costing and Variance Analysis