CPA Business Environment and Concepts (BEC) : Cost Accounting Variance Formulas
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Example Questions
Example Question #1 : Operations Management: Cost Accounting
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
Indirect labor spending
Labor usage
Labor rate
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 #1 : Cost Accounting Variance Formulas
Which of the following types of variances would a purchasing manager most likely influence?
Direct labor efficiency
Direct labor rate
Direct materials price
Direct materials quantity
Direct materials price
The direct materials price variance could be used to monitor purchasing manager performance.
Example Question #2 : Cost Accounting Variance Formulas
Which of the following standard costing variances would be least controllable by a production supervisor?
Overhead efficiency
Labor efficiency
Overhead volume
Material usage
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 #3 : Cost Accounting Variance Formulas
The only sales variance listed below that does not use contribution margin to compute results is:
Market share variance
Sales price variance
Sales volume variance
Market size variance
Sales price variance
The sales price variance does not use contribution margin.
Example Question #4 : Cost Accounting Variance Formulas
The production volume variance is due to:
A significant shift in the mix and yield of direct labor relative to the static budget
]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
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 #1 : Cost Accounting Variance Formulas
The cost of goods manufactured would generally not include which of the following?
Selling costs
Overhead
Direct labor
Direct materials
Selling costs
Selling costs are not relevant for the goods a firm manufactures, rather this would be relevant for the cost of goods sold.
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