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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.
In the context of management control, what is another term for an efficiency variance?
variance due to control
variance without control
usage variance
variance in effectiveness
performance variance
2.
What is the primary objective of conducting variance analysis in cost accounting?
Identify the causes of variances
Enhance performance moving forward
Gain insights for improvements
All of the above
3.
Given a flexible budget variance of $95,000 and actual costs amounting to $40,000, what is the value of the flexible budget cost?
$135,000
$45,000
$50,000
$55,000
4.
If the real cost of a material is lower than the planned cost, what does this indicate?
The price variance is favorable
The price variance is unfavorable
The cost variance is favorable
The cost variance is unfavorable
None of the above
5.
What is the term for a budget designed based on one fixed level of output?
advertising budget
procedural budget
fixed budget
flexible budget
variable budget
6.
When is performance assessment conducted solely based on price variance?
positive
negative
neutral
equal to one
none of the above
7.
If the efficiency variance amounts to 200 units and the actual quantity of input used is 500 units, what is the budgeted input quantity?
300 units
700 units
800 units
500 units
8.
What term describes the variance between the actual cost of inputs and the budgeted cost of inputs?
price variance
actual output price
budgeted output price
actual selling price
9.
Which costing method targets specific activities as the main cost object?
activity-based costing
enhanced costing
knowledge-driven improvements
optimal efficiency
none of the above
10.
Variance represents the difference between the anticipated performance and the ___________?
projected revenue
actual outcomes
marketing outcomes
budgeted costs
11.
Given a budgeted input cost of $50 and a price variance of $30, what is the actual price?
$100
$20
$80
$60
None of the above
12.
What term describes the precisely measured amount of input used?
output measure
input measure
standard input
standard output
13.
Which term best describes the extent to which set goals or income targets are met?
assessment of expansion
evaluation of performance
measure of productivity
effectiveness
14.
If the actual input used is 200 units and the planned input is 50 units, what is the efficiency variance?
275 units
250 units
150 units
650 units
None of the above
15.
Given that the flexible budget variance amounts to $105,000 and the actual cost incurred is $65,000, what is the value of the flexible budget cost?
$40,000
$50,000
$150,000
$170,000
16.
In the context of a static budget, how is the reduction in actual operating income compared to the budgeted figure categorized?
variance in revenue
variance in expenses
unfavorable variance
favorable variance
neutral variance
17.
When calculating variable direct cost input, dividing one unit of standard input by the standard cost per output unit yields what value?
standard price for each input unit
standard price for each output unit
standard cost for each input unit
standard cost for each output unit
18.
Given that the actual cost of an input is $150 and the planned cost was $80, what is the resulting price variance?
$130
$70
$150
$80
None of the above
19.
Given an actual input price of $700, a budgeted input price of $400, and an actual quantity of 50 units, what is the price variance?
$15,000
$13,000
$11,000
$9,000
20.
Given an actual input of 300 units and a planned input of 100 units, what is the efficiency variance?
600 units
200 units
400 units
500 units
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