Chapter 14 More Variance Analysis.pdf

F5 acca performance management practice questions F5 acca performance management practice questions F5 acca performance management practice questions

More Variance Analysis

Prepared for Educational Purposes

August 16, 2025

Contents

1

1 Part 1: List of Questions

This section contains 50 multiple-choice questions based on More Variance Analysis, focusing on material mix and yield variances, labour variances with idle time, and sales mix and quantity variances Numbers are left-aligned from 1 to 50

1 Which of the following statements is/are true?

1 A favourable mix variance will usually result in a favourable yield variance

2 A favourable mix variance will mean that a higher proportion of a cheap material

is being used instead of a more expensive one

a Statement 1 only

b Statement 2 only

c Neither statement

d Both statements

2 A company produces units that should take 1.5 hours to make The standard rate of pay is $15 per hour Idle time is expected to be 10% of hours paid They actually produce 20,000 units They pay $520,000 for 38,000 hours, of which 3,000 hours are idle What is the labour efficiency variance (to the nearest $)?

a $83,333 (adverse)

b $80,000 (adverse)

c $120,000 (adverse)

d $75,000 (adverse)

3 A company has budgeted on selling 7,000 units of product X at a selling price of $30 per unit, and 3,000 units of product Y at a selling price of $40 per unit The standard contribution per unit is 30% of selling price for both products They actually sell 8,000 units of X and 7,000 units of Y What is the sales quantity contribution variance?

a $57,000 (adverse)

b $49,500 (adverse)

c $49,500 (favourable)

d $57,000 (favourable)

4 A company has budgeted on selling 7,000 units of product X at a selling price of $30 per unit, and 3,000 units of product Y at a selling price of $40 per unit The standard contribution per unit is 30% of selling price for both products They actually sell 8,000 units of X and 7,000 units of Y What is the sales mix variance?

a $7,500 (favourable)

b $49,500 (favourable)

c $7,500 (adverse)

d $49,500 (adverse)

5 Which of the following describes an expected standard within the context of budget-ing?

a A standard set at a level which makes no allowance for waste and machine down-time

b A standard which is kept unchanged over a period of time

c A standard which is based on current price levels

d A standard which assumes an efficient level of operation, but which includes an allowance for factors such as waste and machine downtime

6 A company uses two materials, A and B, with standard costs of $5/kg and $10/kg, respectively The standard mix is 2:3, and 5 kg produces 4 units Last month, 4,000 units were produced using 2,100 kg of A and 3,150 kg of B What is the material mix variance?

a $420 (favourable)

b $420 (adverse)

c $525 (favourable)

d $525 (adverse)

7 A company produces units that should take 2 hours at $12 per hour Idle time is 5%

of hours paid They produce 10,000 units, paying $250,000 for 21,000 hours, of which 1,000 hours are idle What is the labour efficiency variance?

a $12,000 (adverse)

b $12,000 (favourable)

c $24,000 (adverse)

d $24,000 (favourable)

8 A company budgets to sell 5,000 units of product A at $20/unit and 5,000 units of product B at $30/unit Standard contribution is 40% of selling price Actual sales are 6,000 units of A and 4,000 units of B What is the sales quantity contribution variance?

a $0

b $1,000 (favourable)

c $1,000 (adverse)

d $2,000 (favourable)

9 A company budgets to sell 5,000 units of product A at $20/unit and 5,000 units of product B at $30/unit Standard contribution is 40% of selling price Actual sales are 6,000 units of A and 4,000 units of B What is the sales mix variance?

a $2,000 (favourable)

b $2,000 (adverse)

c $4,000 (favourable)

d $4,000 (adverse)

10 Which of the following statements is/are true?

1 A favourable yield variance indicates higher output than expected for the input

2 Sales mix variance is irrelevant in single-product companies

a Both statements

b Neither statement

c Statement 1 only

d Statement 2 only

11 A company uses materials X and Y, with standard costs of $4/kg and $8/kg, and a standard mix of 1:1 Total input of 2 kg produces 1 unit Last month, 2,000 units were produced using 2,100 kg of X and 1,900 kg of Y What is the material yield variance?

a $800 (favourable)

b $800 (adverse)

c $1,200 (favourable)

d $1,200 (adverse)

12 A company produces units that should take 3 hours at $10 per hour Idle time is 10%

of hours paid They produce 5,000 units, paying $180,000 for 18,000 hours, of which 2,000 hours are idle What is the labour efficiency variance?

a $10,000 (adverse)

b $10,000 (favourable)

c $15,000 (adverse)

d $15,000 (favourable)

13 A company budgets to sell 4,000 units of product P at $50/unit and 6,000 units of product Q at $60/unit Standard contribution is 25% of selling price Actual sales are 5,000 units of P and 5,000 units of Q What is the sales quantity contribution variance?

a $0

b $2,500 (favourable)

c $2,500 (adverse)

d $5,000 (favourable)

14 A company budgets to sell 4,000 units of product P at $50/unit and 6,000 units of product Q at $60/unit Standard contribution is 25% of selling price Actual sales are 5,000 units of P and 5,000 units of Q What is the sales mix variance?

a $2,500 (favourable)

b $2,500 (adverse)

c $5,000 (favourable)

d $5,000 (adverse)

15 Which of the following describes an ideal standard within the context of budgeting?

a A standard that includes allowances for inefficiencies

b A standard that assumes perfect operating conditions

c A standard based on past performance

d A standard that is revised monthly

16 A company uses materials M and N, with standard costs of $6/kg and $12/kg, and a standard mix of 3:2 Total input of 5 kg produces 4 units Last month, 8,000 units were produced using 5,100 kg of M and 3,400 kg of N What is the material mix variance?

a $600 (favourable)

b $600 (adverse)

c $1,200 (favourable)

d $1,200 (adverse)

17 A company produces units that should take 1 hour at $20 per hour Idle time is 5%

of hours paid They produce 15,000 units, paying $320,000 for 16,000 hours, of which

800 hours are idle What is the labour efficiency variance?

a $4,000 (adverse)

b $4,000 (favourable)

c $8,000 (adverse)

d $8,000 (favourable)

18 A company budgets to sell 6,000 units of product R at $25/unit and 4,000 units of product S at $35/unit Standard contribution is 20% of selling price Actual sales are 5,500 units of R and 4,500 units of S What is the sales quantity contribution variance?

a $0

b $500 (favourable)

c $500 (adverse)

d $1,000 (favourable)

19 A company budgets to sell 6,000 units of product R at $25/unit and 4,000 units of product S at $35/unit Standard contribution is 20% of selling price Actual sales are 5,500 units of R and 4,500 units of S What is the sales mix variance?

a $1,000 (favourable)

b $1,000 (adverse)

c $2,000 (favourable)

d $2,000 (adverse)

20 Which of the following statements is/are true?

1 A favourable material mix variance always reduces total material costs

2 Sales quantity variance measures the impact of total sales volume changes

a Both statements

b Neither statement

c Statement 1 only

d Statement 2 only

21 A company uses materials C and D, with standard costs of $3/kg and $9/kg, and a standard mix of 2:1 Total input of 3 kg produces 2 units Last month, 6,000 units were produced using 4,100 kg of C and 2,050 kg of D What is the material yield variance?

a $600 (favourable)

b $600 (adverse)

c $900 (favourable)

d $900 (adverse)

22 A company produces units that should take 2.5 hours at $14 per hour Idle time is 10% of hours paid They produce 8,000 units, paying $300,000 for 22,000 hours, of which 2,000 hours are idle What is the labour efficiency variance?

a $14,000 (adverse)

b $14,000 (favourable)

c $28,000 (adverse)

d $28,000 (favourable)

23 A company budgets to sell 8,000 units of product T at $40/unit and 2,000 units of product U at $50/unit Standard contribution is 30% of selling price Actual sales are 7,500 units of T and 2,500 units of U What is the sales quantity contribution variance?

a $0

b $1,500 (favourable)

c $1,500 (adverse)

d $3,000 (favourable)

24 A company budgets to sell 8,000 units of product T at $40/unit and 2,000 units of product U at $50/unit Standard contribution is 30% of selling price Actual sales are 7,500 units of T and 2,500 units of U What is the sales mix variance?

a $1,500 (favourable)

b $1,500 (adverse)

c $3,000 (favourable)

d $3,000 (adverse)

25 Which of the following describes a basic standard within the context of budgeting?

a A standard that assumes perfect conditions

b A standard that remains unchanged over time

c A standard that includes allowances for waste

d A standard that is updated monthly

26 A company uses materials E and F, with standard costs of $7/kg and $14/kg, and a standard mix of 1:2 Total input of 3 kg produces 2 units Last month, 10,000 units were produced using 7,600 kg of E and 15,200 kg of F What is the material mix variance?

a $2,533 (favourable)

b $2,533 (adverse)

c $5,066 (favourable)

d $5,066 (adverse)

27 A company produces units that should take 1.2 hours at $18 per hour Idle time is 5% of hours paid They produce 12,000 units, paying $270,000 for 15,000 hours, of which 700 hours are idle What is the labour efficiency variance?

a $6,480 (adverse)

b $6,480 (favourable)

c $12,960 (adverse)

d $12,960 (favourable)

28 A company budgets to sell 3,000 units of product V at $60/unit and 7,000 units of product W at $45/unit Standard contribution is 25% of selling price Actual sales are 4,000 units of V and 6,000 units of W What is the sales quantity contribution variance?

a $0

b $1,250 (favourable)

c $1,250 (adverse)

d $2,500 (favourable)

29 A company budgets to sell 3,000 units of product V at $60/unit and 7,000 units of product W at $45/unit Standard contribution is 25% of selling price Actual sales are 4,000 units of V and 6,000 units of W What is the sales mix variance?

a $3,750 (favourable)

b $3,750 (adverse)

c $7,500 (favourable)

d $7,500 (adverse)

30 Which of the following statements is/are true?

1 A favourable labour efficiency variance indicates fewer hours worked than standard

2 Material yield variance measures the efficiency of material usage in production

a Both statements

b Neither statement

c Statement 1 only

d Statement 2 only

31 A company uses materials G and H, with standard costs of $5/kg and $15/kg, and a standard mix of 4:1 Total input of 5 kg produces 3 units Last month, 9,000 units were produced using 12,000 kg of G and 3,000 kg of H What is the material yield variance?

a $0

b $1,500 (favourable)

c $1,500 (adverse)

d $3,000 (favourable)

32 A company produces units that should take 2 hours at $16 per hour Idle time is 10%

of hours paid They produce 6,000 units, paying $220,000 for 13,750 hours, of which 1,200 hours are idle What is the labour efficiency variance?

a $8,800 (adverse)

b $8,800 (favourable)

c $17,600 (adverse)

d $17,600 (favourable)

33 A company budgets to sell 10,000 units of product X at $35/unit and 5,000 units of product Y at $25/unit Standard contribution is 20% of selling price Actual sales are 9,000 units of X and 6,000 units of Y What is the sales quantity contribution variance?

a $0

b $600 (favourable)

c $600 (adverse)

d $1,200 (favourable)

34 A company budgets to sell 10,000 units of product X at $35/unit and 5,000 units of product Y at $25/unit Standard contribution is 20% of selling price Actual sales are 9,000 units of X and 6,000 units of Y What is the sales mix variance?

a $1,400 (favourable)

b $1,400 (adverse)

c $2,800 (favourable)

d $2,800 (adverse)

35 Which of the following statements is/are true?

1 Sales mix variance is calculated using standard contribution per unit

2 Material mix variance is irrelevant for single-material products

a Both statements

b Neither statement

c Statement 1 only

d Statement 2 only

36 A company uses materials I and J, with standard costs of $8/kg and $16/kg, and a

standard mix of 1:1 Total input of 2 kg produces 1 unit Last month, 5,000 units were produced using 5,200 kg of I and 4,800 kg of Y What is the material mix variance?

a $800 (favourable)

b $800 (adverse)

c $1,600 (favourable)

d $1,600 (adverse)

37 A company produces units that should take 1.8 hours at $15 per hour Idle time is 5% of hours paid They produce 10,000 units, paying $300,000 for 20,000 hours, of which 1,000 hours are idle What is the labour efficiency variance?

a $15,000 (adverse)

b $15,000 (favourable)

c $30,000 (adverse)

d $30,000 (favourable)

38 A company budgets to sell 2,000 units of product Z at $80/unit and 8,000 units of product W at $40/unit Standard contribution is 30% of selling price Actual sales are 3,000 units of Z and 7,000 units of W What is the sales quantity contribution variance?

a $0

b $1,200 (favourable)

c $1,200 (adverse)

d $2,400 (favourable)

39 A company budgets to sell 2,000 units of product Z at $80/unit and 8,000 units of product W at $40/unit Standard contribution is 30% of selling price Actual sales are 3,000 units of Z and 7,000 units of W What is the sales mix variance?

a $3,600 (favourable)

b $3,600 (adverse)

c $7,200 (favourable)

d $7,200 (adverse)

40 Which of the following statements is/are true?

1 A favourable sales quantity variance indicates higher total sales volume than bud-geted

2 Labour efficiency variance includes idle time in its calculation

a Both statements

b Neither statement

c Statement 1 only

d Statement 2 only

41 A company uses materials K and L, with standard costs of $10/kg and $20/kg, and a standard mix of 2:3 Total input of 5 kg produces 4 units Last month, 12,000 units

were produced using 7,600 kg of K and 11,400 kg of L What is the material yield variance?

a $1,500 (favourable)

b $1,500 (adverse)

c $3,000 (favourable)

d $3,000 (adverse)

42 A company produces units that should take 2.2 hours at $17 per hour Idle time is 10% of hours paid They produce 7,000 units, paying $280,000 for 16,500 hours, of which 1,500 hours are idle What is the labour efficiency variance?

a $6,800 (adverse)

b $6,800 (favourable)

c $13,600 (adverse)

d $13,600 (favourable)

43 A company budgets to sell 5,000 units of product M at $70/unit and 5,000 units of product N at $50/unit Standard contribution is 25% of selling price Actual sales are 6,000 units of M and 4,000 units of N What is the sales quantity contribution variance?

a $0

b $1,500 (favourable)

c $1,500 (adverse)

d $3,000 (favourable)

44 A company budgets to sell 5,000 units of product M at $70/unit and 5,000 units of product N at $50/unit Standard contribution is 25% of selling price Actual sales are 6,000 units of M and 4,000 units of N What is the sales mix variance?

a $2,500 (favourable)

b $2,500 (adverse)

c $5,000 (favourable)

d $5,000 (adverse)

45 Which of the following statements is/are true?

1 Material mix variance is calculated using standard costs of materials

2 Sales quantity variance is irrelevant for single-product companies

a Both statements

b Neither statement

c Statement 1 only

d Statement 2 only