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Direct Cost Variances and Management Control
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Direct Cost Variances and Management Control – MCQs
60 questions. Click to practice.
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Correct options are highlighted when revealed.
1.
Within the hierarchy of costing and budgeting, which of the following represents a product sustaining cost?
Cost associated with the product's initial launch
Expenses related to marketing specific production batches
Costs incurred for promoting the product overall
Expenses involved in designing the product
2.
Given that the actual cost of a material is $700 while the planned cost was $900, what type of variance is observed?
The cost variance is positive
The cost variance is negative
The price variance is favorable
The price variance is unfavorable
None of the above
3.
Given that the actual outcome is $65,000 and the static budget variance amounts to $35,000, what is the value of the static budget?
$30,000
$100,000
$200,000
$35,000
$65,000
4.
What term is used to describe the anticipated performance of a company?
cost expectations
provision needs
planned performance
consumer demand
operational targets
5.
Given that the actual labor cost is $1200 while the planned labor cost is $1000, what is the nature of the labor price variance?
negative variance
no variance
favorable variance
unfavorable variance
none of the above
6.
In management control, what serves as the benchmark for evaluating actual performance?
targeted performance
product performance
logistics performance
anticipated performance
7.
Given that the actual cost incurred is $265,000 and the flexible budget cost is $156,000, what is the flexible budget variance?
$409,000
$109,000
$209,000
$309,000
8.
What is another term for an unfavorable variance in a static budget?
positive variance
adverse variance
negative standard deviation
unfavorable difference
beneficial variance
9.
Given a budgeted input cost of $80 and a price variance of $40, what is the actual input price?
$20
$120
$40
$60
$100
10.
Given a static budget variance of $46,000 and a static budget value of $15,000, what is the actual amount recorded?
$80,000
$71,000
$61,000
$31,000
$46,000
11.
What is the term used for the price variance related to direct manufacturing labor?
direct cost variance
rate variance
labor cost variance
production variance
wage variance
12.
Given an actual operating income of $250,000 and a static budget amount of $150,000, what is the static budget variance?
$400,000
$500,000
$100,000
$600,000
None of the above
13.
Given an actual outcome of $50,000 and a static budget variance of $25,000, what is the value of the static budget?
$75,000
$25,000
$35,000
$45,000
14.
What is the term for the difference between the actual budget figures and those in the static budget?
related budget
comprehensive budget variance
procedural variance
static budget variance
flexible budget variance
15.
To determine ___________, the efficiency variance is deducted from the actual quantity of input used.
the actual number of units produced
the planned number of units produced
the forecasted units sold
the planned input quantity
16.
To determine the flexible budget cost, which value is deducted from the actual cost?
flexible budget cost
flexible investment expense
static budget expense
fixed variable expense
17.
What term describes the amount of input utilized to produce a specific quantity of output?
efficiency
effectiveness
growth assessment
performance appraisal
18.
What term describes the intersection where management planning and control activities converge?
operation
variance
fluctuation
discrepancy
alteration
19.
What do you get when you subtract the static budget figure from the actual outcome?
static budget revenue
static budget difference
static budget variance
combined budget variance
20.
Given a budgeted input price of $70, an actual input quantity of 250 units, and a permitted budgeted input quantity of 90 units, what is the efficiency variance?
$23,800
$11,200
$12,200
$13,200
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