50+ Standard Costing MCQ | Cost Accounting MCQs (Free Resource)

21. If the actual number of labour hours worked is less than the standard labour hours allowed for equivalent units produced, this indicates :
(a) An unfavourable labour rate variance
(b) A favourable total labour variance
(c) An unfavourable labour efficiency variance
(d) A favourable labour efficiency variance

22. Which of the following is correct with regard to the standard labour hours being used to compute labour variances ?
Standard labour hours used :
(a) Labour Rate Variance: Yes; Labour Efficiency Variance: No
(b) Labour Rate Variance: Yes; Labour Efficiency Variance: Yes
(c) Labour Rate Variance: No; Labour Efficiency Variance: No
(d) Labour Rate Variance: No; Labour Efficiency Variance: Yes

23. Which of the following is correct with regard to using the standard labour rate to compute labour variances? Standard labour rate used:
(a) Labour Rate Variance: Yes; Labour Efficiency Variance: No
(b) Labour Rate Variance: Yes; Labour Efficiency Variance: Yes
(c) Labour Rate Variance: No; Labour Efficiency Variance: No
(d) Labour Rate Variance: No; Labour Efficiency Variance: Yes

24. What is the primary benefit of a standard costing system?
(a) It records costs at what should have been incurred
(b) It allows for a comparison of differences between actual and standard costs
(c) It is easy to implement
(d) It is inexpensive and easy to use

25. The standard which can be attained under the most favourable conditions possible
(a) Ideal Standard
(b) Expected Standard
(c) Current Standard
(d) Normal Standard

26. A standard which is established for use unaltered for an indefinite period is called
(a) Current standard
(b) Ideal standard
(c) Basic standard
(d) Expected standards

27. Which of the following is not a type of standard, conceptually speaking?
(a) Ideal standards
(b) Negative standards
(c) Expected standards
(d) Current standards

28. Which of the following statements about ideal standards is false?
(a) It is called theoretical or maximum efficiency standard
(b) These are standard costs that are set for production under optimal condition
(c) It makes no allowance for wastage, spoilage and machine breakdowns
(d) It can be used for cash budgeting or product costing

29. The cost of product as determined under standard cost system is
(a) Fixed cost
(b) Historical cost
(c) Direct cost
(d) Predetermined cost

30. The amount of work achievable in an hour, at standard efficiency levels, is
(a) an ideal standard
(b) the direct labour usage per hour
(c) a standard hour
(d) the direct labour efficiency variance

Answer: 21)A favourable labour efficiency variance 22)Labour Rate Variance: No; Labour Efficiency Variance: Yes 23) Labour Rate Variance: Yes; Labour Efficiency Variance: Yes 24)It allows for a comparison of differences between actual and standard costs 25)Ideal Standard 26)Basic standard 27)Negative standards 28)It can be used for cash budgeting or product costing 29)Predetermined cost 30)a standard hour

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1 Response

  1. SHYAMSUNDER KEWAT says:

    Q. NO. 5 3RD ANSWER HOGA

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