The Following Materials Standards Have Been Established for a Particular

question 143

Multiple Choice

The following materials standards have been established for a particular product:
The following data pertain to operations concerning the product for the last month:
What was the materials quantity variance for the month?

• A) $6,664 favourable.
• B) $6,732 favourable.
• C) $13,720 unfavourable.
• D) $13,860 unfavourable.

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Definitions:

Variable Overhead Rate

The rate at which variable overhead costs are allocated to products, changing with the level of production.

Efficiency Variance

A measure in cost accounting that calculates the difference between the actual quantity of input used and the standard amount expected to be used, multiplied by the standard price.

Budget Variance

The difference between budgeted or planned financial performance and the actual performance.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to products based on a specific activity base, aiding in cost control and pricing decisions.