Standard Costing MCQs

1. Which of the following is true of standards?

2. Standards that can be attained only under the best circumstances are referred to as:

3. Which of the following equations can be used to calculate a material price variance?

4. Who is most likely to be held responsible for a material price variance?

5. Which of the following equations can be used to calculate a material quantity variance?

6. To produce a particular batch of product, Foster Corporation paid its workers $12.00 per hour for 4,000 hours of work. The standards for the quantity of work represented by the batch were $12.50 per hour and 4,400 hours. What was the labor efficiency variance?

7. The firm’s direct-labor rate variance was $4,800 unfavorable. Actual labor was 24,000 direct-labor hours, at a cost of $168,000, for 25,000 units of finished product that require 1 hour of direct labor each, at standard. What is the standard rate per direct-labor hour?

8. Which of the following is not an advantage of standard costing?

9. Which of the following is NOT a criticism of a standard-costing system?

10. The organization budgeted $400,000 for 40,000 hours of direct labor to complete 16,000 units of finished product. The firm used 42,000 direct-labor hours and completed 17,000 units of finished product. What is the direct-labor rate variance?