Question 1: Define the term standard costing and describe its benefits and demerits.
Question 2: Describe the critical difference between budgetary control and standard costing?
Question 3: What do you mean by the term Standard Costing? Bring out clearly the relationship between Standards Costing and Budgetary Control.
Question 4: Describe the categorization of Direct Material Cost Variance with appropriate examples.
Question 5: State the reasons for each of the given variances:
a) Direct Material Usage Variance
b) Direct Labor Rate Variance
c) Direct Material Mix Variance
Question 6: What do you mean by the term Variance? Due to what factors does Profit Variance occur?
Question 7: What do you mean by the term Overhead Variance?
Question 8: In a factory section there are 80 workers and average rate of wages per worker is Re 0.50 per hour. Standard working hrs per week is 45 and the standard performance is 6 units per hour.
Throughout the four weeks in February, wages paid for 40 workers was Re. 0.50 per hour, for 15 workers Re. 0.60 per hour, and for 25 workers Re. 0.40 per hour. The section didn’t work for 4 hrs due to the breakdown for machinery.
Work out the labor rate variance for the section for the 4-weeks.