## CA Intermediate Costing/Cost and Management Accounting Exams

### Standard Costing - 50+ Free Past Years MCQs and Objectives 2024 New Syllabus

1) The budgeted fixed overheads for a budgeted production of 10,000 units is Rs.20,000. For a certain period the actual production was 11,000 units and actual expenditure Rs.24,000. The volume variance is —

a) Rs.2,000(F)

b) Rs.4,000(A)

c) Rs.2,000(A)

d) Rs.4,000(F)

2) Which of the following is a method used in analysing financial statements —

a) Variance analysis

b) Trend analysis

c) Break-even analysis

d) Budget analysis.

3) The capacity variance is Rs.52,000 (F), calender variance is Rs.24,064 (A). The volume variance will be —

a) Rs.27,936 (F)

b) Rs.76,064 (A)

c) Rs.27,936 (A)

d) Rs.76,064 (F).

4) Material usage variance can be calculated using the formula —

a) (Standard quantity for actual output – Actual quantity) × Actual price

b) (Standard quantity for actual output – Actual quantity) × Standard price

c) (Standard price – Actual price) × Actual quantity

d) (Standard price – Actual price) × Standard quantity.

5) A chemical is manufactured by combining two standard items Input-X (Standard price Rs.60/kg) and Input-Y (Rs.45/kg) in the ratio 60%:40%. Ten percent of input is lost during processing. If during a month 1,200 Kgs. of chemical is produced incurring a total cost of Rs.69,600, the total material cost variance will be —

a) Rs.2,000(F)

b) Rs.2,400(A)

c) Rs.2,400(F)

d) Rs.3,000(A).

6) Standard hourly rate is Rs.5 per hour and actual rate Rs.4.50 per hour. The labour rate variance is 1,500(F). The actual labour hours worked is —

a) 1,500 Hours

b) 7,500 Hours

c) 3,000 Hours

d) 6,750 Hours.

7) Volume variance is sub-divided into —

a) Efficiency variance and capacity variance

b) Efficiency variance, capacity variance and calendar variance

c) Expenditure variance and efficiency variance

d) Expenditure variance, capacity variance and calendar variance.

8) The standard hourly rate is Rs.5 per hour and actual rate Rs.4.50 per hour. If the labour rate variance is Rs.1,500(F), the actual labour hours worked is —

a) 1,500 hours

b) 7,500 hours

c) 3,000 hours

d) 6,750 hours.

9) Which of the following is not a method of segregating semi-variable costs into fixed and variable costs —

a) Least squares method

b) High and low points method

c) Standard cost method

d) Comparison by level of activity method.

10) Under standard cost system the cost of the product determined at the beginning of production is its:

a) Direct cost

b) Pre-determined cost

c) Historical cost

d) Actual cost

11) The deviations between actual and standard cost is known as:

a) Multiple analysis

b) Variable cost analysis

c) Variance analysis

d) Linear trend analysis

12) The standard which is attainable under favourable conditions is:

a) Theoretical standard

b) Expected standard

c) Normal standard

d) Basic standard

13) The standard most suitable from cost control point of view is:

a) Normal standard

b) Theoretical standard

c) Expected standard

d) Basic standard

14) Overhead cost variances are:

a) The difference between overheads recovered on actual output – actual overhead incurred.

b) The difference between budgeted overhead cost and actual overhead cost.

c) Obtained by multiplying standard overhead absorption rate with the difference between standard hours for actual output and actual hours worked.

d) None of the above

15) Which of the following variance arises when more than one material is used in the manufacture of a product:

a) Material price variance

b) Material usage variance

c) Material yield variance

d) Material mix variance

16) If standard hours for 100 units of output are 400 @ Rs. 2 per hour and actual hours take are 380 @ Rs. 2.25 per, then the labour rate variance is:

a) Rs. 95 (adverse)

b) Rs. 100 (adverse)

c) Rs. 25 (favourable)

d) Rs. 120 (adverse)

17) Controllable variances are best disposed-off by transferring to:

a) Cost of goods sold

b) Cost of goods sold and inventories

c) Inventories of work–in–progress and finished goods

d) Costing profit and loss account

18) Idle time variance is obtained by multiplying:

a) The difference between standard and actual hours by the actual rate of labour per hour

b) The difference between actual labour hours paid and actual labour hours worked by the standard rate

c) The difference between standard and actual hours by the standard rate of labour per hour

d) None of the above.

19) Basic standards are:

a) Those standards, which require high degree of efficiency and performance.

b) Average standards and are useful in long term planning.

c) Standards, which can be attained or achieved

d) Assumed to remain unchanged for a long time.

20) Which of the following variance always shows adverse result?

a) Material mix variance

b) Material yield variance

c) Labour idle time variance

d) Labour gang variance

21) The following information is given :

Standard time 50 hours @ Rs. 60 per hour

Actual wages paid Rs. 3080 @ 55 per hour

Actual time worked 53 hours during the period

Idle time variance will be :

a) Rs. 165 (F)

b) Rs. 165 (A)

c) Rs. 174.34 (A)

d) Rs. 180 (A)

Answer the following questions (22-24) with the given information:

Standard quantity 1200 kg. for output of 1080 kg.

Standard price Rs. 20 per kg.

Material purchased : 1250 kg. at 26,250

Opening and closing Stock of material 200 kg. and 350 kg.

Actual output 1026 kg.

22) The material cost variance will be:

a) Rs. 900 (F)

b) Rs. 2,250 (A)

c) Rs. 300 (A)

d) Rs. 5,400 (A)

23) The Material Usage Variance will be :

a) Rs. 2,000 (F)

b) Rs. 1,000 (A)

c) Rs. 2,000 (A)

d) Rs. 800 (F)

24) The Material Price Variance will be

a) Rs. 1400 (A)

b) Rs. 1250 (F)

c) Rs. 1250 (A)

d) Rs. 1100 (A)

25) The following information is relating to variable overheads of a company :

Budgeted production for May, 2021 45000 units

Budgeted variable overhead Rs. 1,17,000

Standard time for one unit 2 hours

Actual production for May, 2021 37,500 units

Actual hours worked 67500 hours

Actual variable overhead Rs. 1,05,000

The Variable Overhead Expenditure Variance will be :

a) Rs. 17,250 (A)

b) Rs. 9,750 (F)

c) Rs. 7,500 (A)

d) Rs. 17,250 (F)

26) Overhead cost variance is Rs. 9,000 (A), Overhead expenditure variance is Rs. 2,000 and overhead efficiency variance is Rs. 3,000 (F). In this case, overhead capacity variance is :

a) Rs. 11,000 (A)

b) Rs. 8,000 (A)

c) Rs. 1,000 (F)

d) Rs. 10,000 (A)

27) The following are relating to Job No. 102 :

Standard hours planned 40.0

Actual hours worked 36.5

Standard wage rate Rs. 2.60

Actual wage rate Rs. 2.95

Assume that there is no idle time.

The total labour efficiency variance for Job No. 102 is

a) Rs. 10.32 (F)

b) Rs. 9.10 (F)

c) Rs. 14.00 (A)

d) Rs. 12.77 (A)

28) Material yield variance = …………………

a) Material mix variance – Material usage variance

b) Material usage variance – Material mix variance

c) Material usage variance – Material price variance

d) Material mix variance – Material price variance

29) In a manufacturing firm, the standard quantity of material was set at 10 kg and standard price was fixed at Rs. 2 per kg. The actual quantity consumed was 12 kg and the actual price paid was Rs. 1.90 per kg. Calculate material usage variance.

a) Rs. 4 favourable

b) Rs. 4 unfavourable

c) Rs. 2.80 unfavourable

d) Rs. 1.20 favourable

Examine the following relating to Job No. 100 :

Standard hours planned 104.50

Actual hours worked 101.25

Standard wage rate Rs. 5.15

Actual wage rate Rs. 5.25

30) The total labour cost variance for Job No. 100 is ……………….

a) Rs. 6.61 (F)

b) Rs. 6.61 (A)

c) Rs. 10.12 (F)

d) Rs. 10.12 (A)

31) Which of the following is not a reason for an idle time variance ?

a) Wage rate increase

b) Machine break-down

c) Injury to worker

d) Non-availability of material

32) The standard material required to produce one unit of product Z is 5 kgs and the standard price per kg of material is Rs. 30. The Cost Accounts show that 16,000 kgs of material were used for producing 3,000 units. If the material cost variance is Rs. 70,000 unfavourable, the actual price per kg of material is :

a) Rs. 27.50

b) Rs. 29.33

c) Rs. 32.50

d) Rs. 34.67

33) Material Y is used to produce a toy. It is budgeted that each toy will require 4 kgs of material @ Rs. 9 per kg. During a month 1,000 pieces of toys were produced using 4,200 kgs of material purchased at Rs. 50,400. The material price variance is:

a) Rs. 12,600 (A)

b) Rs. 15,000 (A)

c) Rs. 12,600 (F)

d) Rs. 12,000 (A)

34) You are given the following data:

Standard Actual

Material P 7 kg @ Rs. 3 880 kg @ Rs. 3.10

Material Q 3 kg @ Rs. 5 320 kg @ Rs. 4.90

The material mix variance would be:

a) Rs. 120 (A)

b) Rs. 320 (F)

c) Rs. 80 (F)

d) Rs. 80 (A)

35) Following data is given:

Gross Direct Wages Rs. 15,000

Standard hours produced 7600

Standard Rate per hour Rs. 2.10

Actual hours paid @ Rs. 2.40 are 7500, out of which hours not worked (abnormal idle time) are 75 Hours. Labour efficiency variance is :

a) Rs. 240 (A)

b) Rs. 210 (F)

c) Rs. 367.50 (F)

d) Rs. 420 (F)

The records of a manufacturing company reveals the following information :

Budgeted production for Dec. 400 units

Budgeted variable overhead Rs. 8,000

Standard time for one unit 25 hours

Actual production for Dec. 300 units

Actual hours worked 7600 hours

Actual variable overhead Rs. 6,840

36) Variable Overhead Expenditure Variance is :

a) Rs. 760 (A)

b) Rs. 840 (A)

c) Rs. 1,600 (A)

d) Rs. 1,160 (F)

37) You are given the following data :

Standard fixed overhead rate per hour Rs. 5

Actual fixed cost Rs. 1,00,000

Standard production 19,000 units

Actual production 20,000 units

What will be the Fixed Overhead Efficiency Variance?

a) Rs. 5,000 (A)

b) Rs. 5,000 (F)

c) Rs. 10,000 (A)

d) Rs. NIL

38) Which of the followings is not a cause of ‘Material Usage Variance’ ?

a) Lack of due care in the use of materials

b) Defective production necessitating additional materials for correction

c) Abnormal wastage due to pilferage

d) Purchase of material in Economic Order Quantity

39) The following data obtained from the cost records of CS Limited :

Item Standard Actual

Output in units 40,000 50,000

Hours worked 2,500 2,400

Fixed Overheads Rs. 6,00,000 Rs. 9,00,000

Fixed Overhead Volume Variance will be :

a) Rs. 1,20,000 (F)

b) Rs. 3,00,000 (A)

c) Rs. 1,50,000 (F)

d) Rs. 1,50,000 (A)

## Answer Key

- a) Rs.2,000(F)
- b) Trend analysis
- a) Rs.27,936 (F)
- b) (Standard quantity for actual output – Actual quantity) × Standard price
- c) Rs.2,400(F)
- c) 3,000 Hours
- b) Efficiency variance, capacity variance and calendar variance
- c) 3,000 hours
- c) Standard cost method
- b) Pre-determined cost
- c) Variance analysis
- a) Theoretical standard
- c) Expected standard
- a) The difference between overheads recovered on actual output – actual overhead incurred.
- d) Material mix variance
- a) Rs. 95 (adverse)
- d) Costing profit and loss account
- b) The difference between actual labour hours paid and actual labour hours worked by the standard rate
- d) Assumed to remain unchanged for a long time.
- c) Labour idle time variance
- d) Rs. 180 (A)
- c) Rs. 300 (A)
- d) Rs. 800 (F)
- d) Rs. 1100 (A)
- a) Rs. 17,250 (A)
- d) Rs. 10,000 (A)
- b) Rs. 9.10 (F)
- b) Material usage variance – Material mix variance
- b) Rs. 4 unfavourable
- a) Rs. 6.61 (F)
- a) Wage rate increase
- c) Rs. 32.50
- a) Rs. 12,600 (A)
- c) Rs. 80 (F)
- c) Rs. 367.50 (F)
- a) Rs. 760 (A)
- b) Rs. 5,000 (F)
- d) Purchase of material in Economic Order Quantity
- c) Rs. 1,50,000 (F)

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