Which of the given formula is correct for “labor rate variance”?

• A) (Actual hours worked) X (standard rate of per labor hour / actual rate of per labor hour)
• B) (Actual hours worked) X (actual rate of per labor hour – standard rate of per labor hour)
• C) (Actual hours worked) X (standard rate of per labor hour X actual rate of per labor hour)
• D) (Actual hours worked) X (standard rate of per labor hour + actual rate of per labor hour)

Fixed costs of XYZ company was of Rs. 2,000, and sold 30 units for Rs. 140 each. The total variable costs were Rs. 1,600. What is the net income or loss of the Company?

• A) Rs. 600 loss
• B) Rs. 600 profit
• C) Rs. 2,600 profit
• D) Rs. 2,600 loss

As per the information gathered by management of NS Mills, it was found that cost of manufacturing and cost of importing a certain component is exactly the same. Even then the management decided to manufacture the component.
Required: What is the advantage of this decision?

• A) Cost per unit increases as variable cost increase
• B) Cost per unit decreases as fixed cost is same
• C) Increased workload on supervisor
• D) Increased workload on labor

An electric company produced and sold ceiling fans at Rs. 1,500 each by incurring the variable cost of Rs. 1,200 each and fixed cost of Rs. 300,000.
Required: What is break-even point in units?

• A) Rs.1200
• B) Rs.1000
• C) Rs.1500
• D) Rs.3000

Sales value of product A after further processing is of Rs. 33,500; sales value of the product at split off is of Rs. 25,000; and additional processing cost of Rs. 15,000.
Required: Identify the incremental sales revenue for Product A.

• A) Rs. 8,500
• B) Rs. 33,000
• C) Rs. 18,500
• D) Rs. 10,000

Which of the following is not a type of variance?

• A) Material usage variance
• B) Unusual variance
• C) Labor efficiency variance
• D) Material price variance

Which of the following step is involved in decision making process in the manufacturing industry?

• A) Identify the Alternatives
• B) All of the given options
• C) Collect the Data
• D) Clarify the Decision Problem

Which of the following is a type of fixed overhead variance?

• A) Efficiency variance
• B) Spending variance
• C) Volume variance
• D) None of the given options

Which of the given is correct for “sales volume profit variance”?

• A) (Actual unit sold +budgeted nits sold) X (Standard profit per unit)
• B) (Actual unit sold +budgeted nits sold) / Standard profit per unit
• C) (Actual unit sold –budgeted nits sold) X (Standard profit per unit
• D) (Actual unit sold –budgeted nits sold) / Standard profit per unit

Which of the given formula is used to calculate activity ratio?

• A) None of the given options
• B) Standard hours produced ÷ Budgeted labor hours
• C) Standard hours produced ÷ Actual labor hours worked
• D) Actual labor hours worked ÷ Budgeted labor hours

Which of the following would be considered as Relevant Cost?

• A) Depreciation expense of existing machinery
• B) Historical cost of plant & machinery
• C) Book value of existing machinery
• D) The current disposal price of existing machinery

Which of the following is not a source of production cost variance?

• A) Prediction Error
• B) Errors in accumulating cost data
• C) Error in accumulating sales data
• D) Planning Error

According to informative analyst, Mr. Joel, which of the following is the source of production cost variance?

• A) None of the given options
• B) Operating error
• C) Cost control
• D) Cost reduction

Following information has been extracted from the Books of ABC Company.
Actual cost incurred Rs. 39,000; Budget based on actual activity Rs. 38,000 and Standard Cost of actual output Rs. 39,500.
Required: Identify Efficiency Variance with the help of provided information.

• A) Rs. 1,500 adverse
• B) Rs. 1,000 adverse
• C) Rs. 1,000 favorable
• D) Rs. 1,500 favorable

…………………………. in measuring the actual cost of operating a process.

• A) A measurement deviation
• B) An implementation Deviation
• C) A standard deviation
• D) A prediction deviation

Budgeted sales= 1,500 units
Budgeted price= 62 Rs. Per unit
Revised price= 70 Rs. Per unit
Selling price planning variance= ?

• A) Rs. 15,000 Favorable
• B) Rs. 15,000 Adverse
• C) Rs. 12,000 Adverse
• D) Rs. 12,000 Favorable

Mr. A distributes leather products in local market and his transportation cost is of Rs. 7 per Kilometer to deliver product by using taxi. He is considering two alternatives i.e. motor cycle which cost of Rs. 84,000 or small Car which costs for Rs. 300,000 on expansion of sales area.

Required: By considering the given information which alternative; Mr. A should consider if he has to travel 20,000 km Per annum.

• A) Local transport: Taxi
• B) Alternative 2: Small car
• C) Alternative 1: Motor cycle
• D) More information is required to find answer

Actual labor hours= 18,000
Standard labor hours= 16,500
Standard labor rate= 12 Rs. Per hour
Actual labor rate= 10 Rs. Per hour
Labor efficiency variance= ?

• A) Rs. 15,000 Adverse
• B) Rs. 15,000 Favorable
• C) Rs. 18,000 Favorable
• D) Rs. 18,000 Adverse

Which of the following cost is NOT relevant for decision making?

• A) Overtime wages to manufacture the product
• B) Opportunity cost
• C) Incremental cost
• D) Sunk cost

Which of the following is NOT feature of a relevant cost?

• A) It affects the future cash flows
• B) It affects the future cost
• C) It causes an increment in cost
• D) It is a sunk cost