Sub: Accounts Topic: Standard Costing
Short questions on standard costing and flexible budgeting
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1. Which of the following is NOT true about variances in general?
a. The total variance is the difference between the budgeted cost for the budgeted
activity level and the actual cost at that level
b. The total variance can be decomposed into usage and price variances.
c. A performance report shows the total variance for various costs
d. All of these statements are true about variances.
Answer: c. A performance report shows the total variance for various costs
2. Which of the following is NOT true about currently attainable standards?
a. they are based on an efficiently operating work force
b. they are based on ideal conditions
c. they allow for downtime and rest periods
d. they are based on present production processes and technology
Answer: a. they are based on an efficiently operating work force