Cost Accounting Variance Formulas
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CPA Auditing and Attestation (AUD) › Cost Accounting Variance Formulas
The differences between standard hours at standard wage rates and actual hours at standard wage rates is referred to as which of the following types of variances
Direct labor spending
Indirect labor spending
Labor rate
Labor usage
Explanation
The difference between standard hours at standard wage rates and actual hours at standard rates is the labor usage/efficiency variance.
Which of the following types of variances would a purchasing manager most likely influence?
Direct labor rate
Direct materials quantity
Direct labor efficiency
Direct materials price
Explanation
The direct materials price variance could be used to monitor purchasing manager performance.
Which of the following standard costing variances would be least controllable by a production supervisor?
Overhead volume
Labor efficiency
Overhead efficiency
Material usage
Explanation
The overhead volume variance is a function of the budgeted amount of overhead based on standard hours. The production supervisor has little control over established standard and budgeted amounts.
The only sales variance listed below that does not use contribution margin to compute results is:
Market size variance
Sales price variance
Sales volume variance
Market share variance
Explanation
The sales price variance does not use contribution margin.
The production volume variance is due to:
Efficient or inefficient use of variable overhead
A significant shift in the mix and yield of direct labor relative to the static budget
Difference from the planned level of the base used for overhead allocation and the actual level achieved
\]Inefficient or efficient use of direct labor hours
Explanation
The production volume variance is due to the difference from the planned level of the based used for overhead allocation and the actual level achieved.
The cost of goods manufactured would generally not include which of the following?
Selling costs
Direct labor
Direct materials
Overhead
Explanation
Selling costs are not relevant for the goods a firm manufactures, rather this would be relevant for the cost of goods sold.