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B Com Exam  >  B Com Tests  >  Cost Management  >  Test: Standard Costing - 2 - B Com MCQ

Test: Standard Costing - 2 - B Com MCQ


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10 Questions MCQ Test Cost Management - Test: Standard Costing - 2

Test: Standard Costing - 2 for B Com 2024 is part of Cost Management preparation. The Test: Standard Costing - 2 questions and answers have been prepared according to the B Com exam syllabus.The Test: Standard Costing - 2 MCQs are made for B Com 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Standard Costing - 2 below.
Solutions of Test: Standard Costing - 2 questions in English are available as part of our Cost Management for B Com & Test: Standard Costing - 2 solutions in Hindi for Cost Management course. Download more important topics, notes, lectures and mock test series for B Com Exam by signing up for free. Attempt Test: Standard Costing - 2 | 10 questions in 10 minutes | Mock test for B Com preparation | Free important questions MCQ to study Cost Management for B Com Exam | Download free PDF with solutions
Test: Standard Costing - 2 - Question 1
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Which of the following best defines the term "Analysis of Variance" in the context of standard costing?

Detailed Solution for Test: Standard Costing - 2 - Question 1
The correct answer is Option B. In the context of standard costing, "Analysis of Variance" refers to the process of isolating the causes of variances between actual and standard costs. It involves identifying why there are differences between the expected standard costs and the actual costs incurred. This analysis helps management understand the reasons behind these variances and take appropriate corrective actions.
Test: Standard Costing - 2 - Question 2
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What is the primary purpose of calculating variances in standard costing?

Detailed Solution for Test: Standard Costing - 2 - Question 2
The correct answer is Option D. The primary purpose of calculating variances in standard costing is to compare actual costs with standard costs. This helps in assessing how well the organization is performing in terms of cost control and efficiency. Variances can be either favourable or unfavourable, and the analysis of these variances provides valuable insights for management to make informed decisions.
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Test: Standard Costing - 2 - Question 3
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What is an "uncontrollable variance" in the context of standard costing?

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The correct answer is Option C. An "uncontrollable variance" in the context of standard costing is a variance that arises due to unforeseen factors beyond the control of a person or department. These factors are typically external or unexpected events that affect costs but cannot be managed or corrected by the responsible individuals or departments.
Test: Standard Costing - 2 - Question 4
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What does "Budgeted Figure" refer to in the context of variance analysis?
Detailed Solution for Test: Standard Costing - 2 - Question 4
The correct answer is Option B. In the context of variance analysis, "Budgeted Figure" refers to the standard cost based on normal production. It represents the expected or standard cost for a specific level of production and serves as a benchmark for comparing actual costs.
Test: Standard Costing - 2 - Question 5
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What is the formula for calculating the Variable Overhead Efficiency Variance (VOEV)?
Detailed Solution for Test: Standard Costing - 2 - Question 5
The correct formula for calculating the Variable Overhead Efficiency Variance (VOEV) is (Std. Time x Std. Rate) - (Actual Time x Actual Rate). This variance measures the efficiency in the use of labor hours for actual production compared to the standard labor hours.
Test: Standard Costing - 2 - Question 6
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Which type of variance is calculated as the difference between the standard quantity and the actual quantity of material used, multiplied by the standard price?
Detailed Solution for Test: Standard Costing - 2 - Question 6
The correct answer is Option C. Material Usage Variance (MUV) is calculated as the difference between the standard quantity and the actual quantity of material used, multiplied by the standard price. It measures the variance caused by the difference in the quantity of material used compared to the standard quantity.
Test: Standard Costing - 2 - Question 7
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What is the purpose of analyzing overhead variances in standard costing?
Detailed Solution for Test: Standard Costing - 2 - Question 7
The correct answer is Option D. The purpose of analyzing overhead variances in standard costing is to understand the reasons behind cost deviations in overhead expenses. It helps management identify whether the overhead costs incurred are in line with the expected standard costs or if there are variations that need to be investigated and addressed.
Test: Standard Costing - 2 - Question 8
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Which type of variance arises due to idle time of workers caused by factors like strikes or machinery breakdown?
Detailed Solution for Test: Standard Costing - 2 - Question 8
The correct answer is Option D. Idle Time Variance (ITV) arises due to the idle time of workers caused by factors like strikes, machinery breakdown, or other unforeseen events. It represents the cost of wages paid for the time during which workers remained idle and is considered an unfavorable variance.
Test: Standard Costing - 2 - Question 9
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What is the formula for calculating Fixed Overhead Volume Variance (FOVV)?
Detailed Solution for Test: Standard Costing - 2 - Question 9
The correct formula for calculating Fixed Overhead Volume Variance (FOVV) is (Std. Time for Actual Output - Budgeted Time) x Std. Rate. FOVV measures the variance in overhead costs due to differences in the volume of output produced compared to the budgeted volume.
Test: Standard Costing - 2 - Question 10
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What is the purpose of analyzing Material Mix Variance (MMV) in standard costing?
Detailed Solution for Test: Standard Costing - 2 - Question 10
Material Mix Variance (MMV) analysis in standard costing serves the purpose of understanding the reasons behind variations in material usage. It helps identify why the actual mix of materials differs from the standard mix, aiding in cost control and management decisions.
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