Module 7 - Variance Analysis

Question 1

Standard cost

Answer 1

expected cost to manufacture a single unit of product

Question 2

variances

Answer 2

differences between standard and actual performances

Question 3

Sales volume contribution variance

Answer 3

variance due to selling more or less units than expected: standard contribution x variance

Question 4

Sales price variance

Answer 4

variance in sales price x total sales

Question 5

Materials price variance

Answer 5

total actual materials used x variance in price

Question 6

materials usage variance

Answer 6

actual production units variance x units produced x standard cost of materials

Question 7

labour rate variance

Answer 7

variance in price x total actual hours used

Question 8

labour efficiency variance

Answer 8

variance in hours used x actual units x standard cost pe r hour

Question 9

fixed overhead expenditure variance

Answer 9

Difference in overheads

Question 10

Flexed budget

Answer 10

Original budgeted profit - sales volume contribution variance