Basic Variance Analysis – NBC Institute

MI – Nov 2020 – L1 – SB – Q4b – Basic Variance Analysis

Calculate material and labour variances for product AB, and list possible causes of each variance.

Question

b. ABC maintains the following standard cost card for product AB:

Item	Standard Quantity	Standard Price	Total Cost (N)
Direct Material A	3kg @ N8 per kg	N24
Direct Material B	5kg @ N6 per kg	N30
Direct Labour	2hrs @ N24 per hr	N48
Variable Overhead	2hrs @ N9 per hr	N18
Total Standard Cost			N120

Actual Results for the Period:

Actual production: 11,800 units
Direct material A: 35,800kg @ N7.5 per kg = N268,500
Direct material B: 62,000kg @ N7 per kg = N434,000
Direct labour: 24,500 hours @ N25 per hour = N612,500
Variable overhead: 24,500 hours @ N9 per hour = N220,500

Required:
i. Calculate the following variances:

Material price
Material usage
Total material
Labour rate
(9 Marks)

ii. List TWO possible causes of each of the variances in (i) above. (3 Marks)

Answer

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Tags: Labour Variance, Material Variance, Standard Costing, Variance Analysis
Level: Level 1

Topic: Basic Variance Analysis
Series: NOV 2020

MI – Nov 2021 – L1 – SB – Q2b – Basic Variance Analysis

State causes of variances for direct material and direct labour.

Question

State the causes of the variances in Direct Material and Direct Labour calculated in Question 2a.

Answer

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Tags: Direct Labour, Direct Material, Variance Analysis
Level: Level 1

Topic: Basic Variance Analysis
Series: NOV 2021

MI – Nov 2021 – L1 – SB – Q2a – Basic Variance Analysis

Calculate material, labour, and overhead variances for a single product manufacturing company.

Question

The following data was extracted from the records of a company manufacturing a single product:

Answer

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Tags: Direct Labour, Direct Material, Overhead, Variance Analysis
Level: Level 1

Topic: Basic Variance Analysis
Series: NOV 2021

MI – Nov 2021 – L1 – SA – Q9 – Basic Variance Analysis

Calculate the total material variance for product TU.

Question

STUV is into production of a single product TU. Standard material cost per unit is 2kg @₦500 per kg. Actual production during the period is 5,000 units. Using 1.95kg purchased at the rate of ₦510 per kg. What is the total material variance?

A. ₦125,000 (F)
B. ₦97,500 (A)
C. ₦97,500 (F)
D. ₦27,500 (F)
E. ₦27,500 (A)

Answer

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Tags: Costing, Material Variance, Standard Costing
Level: Level 1

Topic: Basic Variance Analysis
Series: NOV 2021

MI – May 2022 – L1 – SA – Q9 – Basic Variance Analysis

Calculating efficiency ratio based on labor hours.

Question

XYZ manufacturing was able to achieve 95 percent of budgeted labour hours. If budgeted labour hours are 44,737 and standard hours produced is 42,075, what is the efficiency ratio?

A. 106%
B. 101%
C. 99%
D. 94%
E. 89%

Answer

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Tags: Efficiency Ratio, Labor Hours, Variance
Level: Level 1

Topic: Basic Variance Analysis
Series: MAY 2022

MI – Mar-Jul 2020 – L1 – SA – Q1 – Basic Variance Analysis

Identify which option is not a typical cause of material variances in a manufacturing setup.

Question

Which of the following is NOT a typical cause of material variances?

A. Paying higher or lower prices than planned
B. Losing or gaining quantity discounts
C. Buying complementary materials due to availability of planned material
D. Buying lower or higher quality than planned
E. Greater or lower yield from materials than planned

Answer

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Tags: Basic Variance Analysis, Cost Management, Management Information, Material variances, Variances
Level: Level 1

Topic: Basic Variance Analysis
Series: MAR/JULY 2020

MI – May 2015 – L1 – SA – Q8 – Basic Variance Analysis

Identify the variance type based on volume multiplied by standard absorption rate.

Question

The difference between actual and budgeted production volume multiplied by the standard absorption rate per unit is known as
A. Fixed overhead capacity variance
B. Fixed overhead efficiency variance
C. Fixed overhead volume variance
D. Fixed overhead total variance
E. Fixed overhead expenditure variance

Answer

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Tags: Fixed Overhead, Multiple Choice, Objective Question, Variance Analysis
Level: Level 1

Topic: Basic Variance Analysis
Series: MAY 2015

MI – Nov 2020 – L1 – SB – Q4b – Basic Variance Analysis

Calculate material and labour variances for product AB, and list possible causes of each variance.

Question

b. ABC maintains the following standard cost card for product AB:

Item	Standard Quantity	Standard Price	Total Cost (N)
Direct Material A	3kg @ N8 per kg	N24
Direct Material B	5kg @ N6 per kg	N30
Direct Labour	2hrs @ N24 per hr	N48
Variable Overhead	2hrs @ N9 per hr	N18
Total Standard Cost			N120

Actual Results for the Period:

Actual production: 11,800 units
Direct material A: 35,800kg @ N7.5 per kg = N268,500
Direct material B: 62,000kg @ N7 per kg = N434,000
Direct labour: 24,500 hours @ N25 per hour = N612,500
Variable overhead: 24,500 hours @ N9 per hour = N220,500

Required:
i. Calculate the following variances:

Material price
Material usage
Total material
Labour rate
(9 Marks)

ii. List TWO possible causes of each of the variances in (i) above. (3 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Labour Variance, Material Variance, Standard Costing, Variance Analysis
Level: Level 1

Topic: Basic Variance Analysis
Series: NOV 2020

MI – Nov 2021 – L1 – SB – Q2b – Basic Variance Analysis

State causes of variances for direct material and direct labour.

Question

State the causes of the variances in Direct Material and Direct Labour calculated in Question 2a.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Direct Labour, Direct Material, Variance Analysis
Level: Level 1

Topic: Basic Variance Analysis
Series: NOV 2021

MI – Nov 2021 – L1 – SB – Q2a – Basic Variance Analysis

Calculate material, labour, and overhead variances for a single product manufacturing company.

Question

The following data was extracted from the records of a company manufacturing a single product:

Answer

Find Related Questions by Tags, levels, etc.

Tags: Direct Labour, Direct Material, Overhead, Variance Analysis
Level: Level 1

Topic: Basic Variance Analysis
Series: NOV 2021

MI – Nov 2021 – L1 – SA – Q9 – Basic Variance Analysis

Calculate the total material variance for product TU.

Question

A. ₦125,000 (F)
B. ₦97,500 (A)
C. ₦97,500 (F)
D. ₦27,500 (F)
E. ₦27,500 (A)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Costing, Material Variance, Standard Costing
Level: Level 1

Topic: Basic Variance Analysis
Series: NOV 2021

MI – May 2022 – L1 – SA – Q9 – Basic Variance Analysis

Calculating efficiency ratio based on labor hours.

Question

XYZ manufacturing was able to achieve 95 percent of budgeted labour hours. If budgeted labour hours are 44,737 and standard hours produced is 42,075, what is the efficiency ratio?

A. 106%
B. 101%
C. 99%
D. 94%
E. 89%

Answer

Find Related Questions by Tags, levels, etc.

Tags: Efficiency Ratio, Labor Hours, Variance
Level: Level 1

Topic: Basic Variance Analysis
Series: MAY 2022

MI – Mar-Jul 2020 – L1 – SA – Q1 – Basic Variance Analysis

Identify which option is not a typical cause of material variances in a manufacturing setup.

Question

Which of the following is NOT a typical cause of material variances?

Answer

Find Related Questions by Tags, levels, etc.

Tags: Basic Variance Analysis, Cost Management, Management Information, Material variances, Variances
Level: Level 1

Topic: Basic Variance Analysis
Series: MAR/JULY 2020

MI – May 2015 – L1 – SA – Q8 – Basic Variance Analysis

Identify the variance type based on volume multiplied by standard absorption rate.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Fixed Overhead, Multiple Choice, Objective Question, Variance Analysis
Level: Level 1

Topic: Basic Variance Analysis
Series: MAY 2015

Topic: Basic Variance Analysis

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MI – Nov 2020 – L1 – SB – Q4b – Basic Variance Analysis

Calculate material and labour variances for product AB, and list possible causes of each variance.

MI – Nov 2021 – L1 – SB – Q2b – Basic Variance Analysis

State causes of variances for direct material and direct labour.

MI – Nov 2021 – L1 – SB – Q2a – Basic Variance Analysis

Calculate material, labour, and overhead variances for a single product manufacturing company.

MI – Nov 2021 – L1 – SA – Q9 – Basic Variance Analysis

Calculate the total material variance for product TU.

MI – May 2022 – L1 – SA – Q9 – Basic Variance Analysis

Calculating efficiency ratio based on labor hours.

MI – Mar-Jul 2020 – L1 – SA – Q1 – Basic Variance Analysis

Identify which option is not a typical cause of material variances in a manufacturing setup.

MI – May 2015 – L1 – SA – Q8 – Basic Variance Analysis

Identify the variance type based on volume multiplied by standard absorption rate.

MI – Nov 2020 – L1 – SB – Q4b – Basic Variance Analysis

Calculate material and labour variances for product AB, and list possible causes of each variance.

MI – Nov 2021 – L1 – SB – Q2b – Basic Variance Analysis

State causes of variances for direct material and direct labour.

MI – Nov 2021 – L1 – SB – Q2a – Basic Variance Analysis

Calculate material, labour, and overhead variances for a single product manufacturing company.

MI – Nov 2021 – L1 – SA – Q9 – Basic Variance Analysis

Calculate the total material variance for product TU.

MI – May 2022 – L1 – SA – Q9 – Basic Variance Analysis

Calculating efficiency ratio based on labor hours.

MI – Mar-Jul 2020 – L1 – SA – Q1 – Basic Variance Analysis

Identify which option is not a typical cause of material variances in a manufacturing setup.

MI – May 2015 – L1 – SA – Q8 – Basic Variance Analysis

Identify the variance type based on volume multiplied by standard absorption rate.

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MI – Nov 2020 – L1 – SB – Q4b – Basic Variance Analysis

Calculate material and labour variances for product AB, and list possible causes of each variance.

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MI – Nov 2021 – L1 – SB – Q2b – Basic Variance Analysis

State causes of variances for direct material and direct labour.

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MI – Nov 2021 – L1 – SB – Q2a – Basic Variance Analysis

Calculate material, labour, and overhead variances for a single product manufacturing company.

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MI – Nov 2021 – L1 – SA – Q9 – Basic Variance Analysis

Calculate the total material variance for product TU.

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MI – May 2022 – L1 – SA – Q9 – Basic Variance Analysis

Calculating efficiency ratio based on labor hours.

You're reporting an error for "MI – May 2022 – L1 – SA – Q9 – Basic Variance Analysis"

MI – Mar-Jul 2020 – L1 – SA – Q1 – Basic Variance Analysis

Identify which option is not a typical cause of material variances in a manufacturing setup.

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MI – May 2015 – L1 – SA – Q8 – Basic Variance Analysis

Identify the variance type based on volume multiplied by standard absorption rate.

You're reporting an error for "MI – May 2015 – L1 – SA – Q8 – Basic Variance Analysis"

MI – Nov 2020 – L1 – SB – Q4b – Basic Variance Analysis

Calculate material and labour variances for product AB, and list possible causes of each variance.

You're reporting an error for "MI – Nov 2020 – L1 – SB – Q4b – Basic Variance Analysis"

MI – Nov 2021 – L1 – SB – Q2b – Basic Variance Analysis

State causes of variances for direct material and direct labour.

You're reporting an error for "MI – Nov 2021 – L1 – SB – Q2b – Basic Variance Analysis"

MI – Nov 2021 – L1 – SB – Q2a – Basic Variance Analysis

Calculate material, labour, and overhead variances for a single product manufacturing company.

You're reporting an error for "MI – Nov 2021 – L1 – SB – Q2a – Basic Variance Analysis"

MI – Nov 2021 – L1 – SA – Q9 – Basic Variance Analysis

Calculate the total material variance for product TU.

You're reporting an error for "MI – Nov 2021 – L1 – SA – Q9 – Basic Variance Analysis"

MI – May 2022 – L1 – SA – Q9 – Basic Variance Analysis

Calculating efficiency ratio based on labor hours.

You're reporting an error for "MI – May 2022 – L1 – SA – Q9 – Basic Variance Analysis"

MI – Mar-Jul 2020 – L1 – SA – Q1 – Basic Variance Analysis

Identify which option is not a typical cause of material variances in a manufacturing setup.

You're reporting an error for "MI – Mar-Jul 2020 – L1 – SA – Q1 – Basic Variance Analysis"

MI – May 2015 – L1 – SA – Q8 – Basic Variance Analysis

Identify the variance type based on volume multiplied by standard absorption rate.

You're reporting an error for "MI – May 2015 – L1 – SA – Q8 – Basic Variance Analysis"

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