Which of the given is correct for “variable overhead efficiency variance”?

• A) (Absorbed variable overhead) – (Standard variable overhead at actual output)
• B) (Absorbed variable overhead) + (Standard variable overhead at actual output)
• C) (Absorbed variable overhead) – (Standard variable overhead at budgeted output)
• D) (Absorbed variable overhead) + (Standard variable overhead at budgeted output)

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

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

Manufacturing cost of a company= Rs.12,00,000
Increase in manufacturing cost due to expansion= 35%
Required: What is differential cost in this case?

• A) Rs.420,000
• B) Rs.840,000
• C) Rs.700,000
• D) Rs.350,000

Current manufacturing cost of “Product- A” for Royal Alma Mater is Rs.400, 000 but its manufacturing cost is increased by 30% due to expansion of business operations.
Identify the amount of differential or incremental cost on the basis of provided data.

• A) Required more information to find differential amount
• B) Rs. 520,000
• C) Rs. 280,000
• D) Rs. 120,000

Absorbed variable overhead= Rs. 360,000
Standard variable overhead= Rs. 300,000
Budgeted factory overhead= Rs. 11,60,000
Actual factory overhead= Rs. 12,00,000
Variable overhead efficiency variance= ?

• A) Rs. 40,000 Favorable
• B) Rs. 60,000 Adverse
• C) Rs. 40,000 Adverse
• D) Rs. 60,000 Favorable

Which step can be taken to improve traditional variance analysis?

• A) by investigating variance which justify on cost and benefit criteria
• B) by calculating operating variance
• C) by calculating planning variance
• D) All of the given options

Which of the following is not an advantage of “to manufacture” a component over “to manufacture a component provided that cost of import and cost of manufacturing are the same?

• A) Expansion improve the job opportunity
• B) Burden on production supervisor
• C) Saving in foreign exchange
• D) Saving time and trouble of arranging import license

Identify Sales Volume Profit Variance if actual units sold and budgeted units sold are 45,000 units and 55,000 units respectively. Actual sales price per unit standard, profit per unit and standard sales price per unit are Rs. 215, Rs. 39 and Rs. 205 respectively.

• A) Rs. 390,000 favorable
• B) Rs. 390,000 adverse
• C) Rs. 450,000 favorable
• D) Rs. 450,000 adverse

Which of the following is advantage of “to make” decision over “to buy” a component provided that make cost and buying cost are the same?

• A) Increasing demand will be met quickly
• B) Cost per unit reduces, due fixed cost remaining the same
• C) Better utilization of available resources.
• D) All of the given options

In budgets if the actual cost is less than budgeted cost, it is accepted as……………….

• A) Error in estimation
• B) Bad performance
• C) Good performance
• D) Status co

Fixed cost= Rs.6600
35 units sold @ Rs.150 each
Total variable cost= Rs.1700
Net income/loss= ?

• A) Rs.1350 loss
• B) Rs.1350 profit
• C) Rs.3050 profit
• D) Rs.3050 loss

Below information has been extracted from the books of a Company:
Benefit for opting new project= Rs.160,000
Direct labor=Rs.60,000
Direct material=Rs.60,000
FOH=Rs. 6000
Operating expenses=Rs.12,000
Required: What is net benefit or loss of opting the project?

• A) Rs. 160,000
• B) Rs. 12,000
• C) Rs. (148,000)
• D) Rs. (110,000)

Which of the following is not true about Budgeting?

• A) Budgeted cost is the predetermined cost of producing a number of units
• B) The budgets emphasize the cost targets
• C) Budget can be set for all functions
• D) Budgeting emphasize on variance analysis

Following information is available for a product C of company X:
At sale price of Rs.90, the number of units sold is 100 units resulting in net profit of -3000. At sale price of Rs.65, the number of units sold is 350 units resulting in net profit of Rs.3250 and at sale price of Rs.60; the number of units sold is 400 units resulting in net profit of Rs.3000.

Required: What should be optimal price for product C?

• A) Rs. 65
• B) Rs. 90
• C) Rs. 60
• D) Rs. 100

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

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

Standard variable overhead= Rs. 365,000
Budgeted fixed overhead= Rs. 810,000
Actual fixed overhead= Rs. 860,000
Standard fixed overhead= Rs. 750,000
Fixed overhead spending variance= ?

• A) Rs. 110,000 Favorable
• B) Rs. 50,000 Favorable
• C) Rs. 50,000 Unfavorable
• D) Rs. 110,000 Unfavorable

Following information has been extracted from the books of a business:
Sales= Rs.112,000
Variable cost= Rs. 38,000
Contribution margin= Rs. 74,000
Fixed cost= Rs. 36,000
Cost of project= Rs.290,000

Required:What is the return on investment in this case?

• A) 5%
• B) 17%
• C) 9%
• D) 13%

Which of the following step(s) is(are) part of decision-making process?

• A) All of the given options
• B) Data collection
• C) Clarify the decision problem
• D) Develop a decision model

Identify sales price variance if actual units sold and budgeted units sold are 35,000 units and 45,000 units respectively. Actual sales price per unit, standard profit per unit and standard sales price per unit are Rs. 215, Rs. 39 and Rs. 205 respectively.

• A) Rs. 390,000 favorable
• B) Rs. 390,000 adverse
• C) Rs. 350,000 favorable
• D) Rs. 350,000 adverse

Following information has been extracted from books of ABC company:
Budgeted Production Actual Production Direct Material standard cost Direct material actual cost
16,000 units 10,000 units Rs.11 Rs. 160,000

Required: What is the standard direct material?

• A) Rs. 176,000
• B) Rs. 91,000
• C) Rs. 61,000
• D) Rs. 101,000