F2 (MA/FMA) – Chapter 14b – PART E – CBE MCQs – ACCA

These are ACCA F2 (MA/FMA) Management Accounting MCQs for Part-E of the Syllabus “Standard costing”.

These MCQs are designed in a way that students could better understand the exam format and get used to practice online. This approach will reduce exam stress and enable students to prepare better.

We request the students, Not to solve the MCQs until they have learned and finished the entire F2 (MA/FMA) Management Accounting Chapter 14b – Sales variances and operating statements and Syllabus Area Part-E “Standard costing”.

All the questions are compulsory, so do not skip any.

INFORMATION ABOUT THESE CBE MCQs Test/Quiz

Course: ACCA – Associations of Chartered Certified Accountants
Fundamental Level: Knowledge, FIA – Foundation in Accounting
Subject: Management Accounting
Paper: F2 – MA/FMA
Chapter: Sales variances and operating statements
Chapter Number: 14b of the Practice and Exam Kit
Syllabus Area: E – Standard costing
Questions Type: CBE MCQs
Exam Section Type: Section A

Syllabus Area

These Multiple Choice Questions (MCQs) cover the Syllabus Area Part E of the Syllabus; Standard costing of ACCA F2 (MA/FMA) Management Accounting Module.

Time

These multiple-choice questions (MCQs) are not timed, allowing students to solve them without feeling any pressure and to pay proper attention to the questions.

Result

Students can see their result at the end of the Quiz. They can also be able to see the number of correct and wrong questions. Moreover, the explanation of wrong questions.

Types of Questions

MCQs: Choose one from the given options.
Multiple choice: Choose all those answers which seem correct/ or incorrect to you, as per the requirement of the question. Keep your eye on the wording “(select all those which are correct/ or incorrect)“.
Drop-down: Select from the list provided.
Type numbers: Type your answer in numbers as per the requirement of the question.


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F2 - Chapter 14b - Part A - MCQs

Course: ACCA - FIA
Subject: F2 (MA/FMA) Management Accounting
Chapter: 14b - Sales variances and operating statements
Syllabus Area: E - Standard costing
Exam Section: Section A
Questions type: MCQs
Time: No Time Limit

INSTRUCTIONS

  1. If you are using mobile, turn on the mobile rotation and solve the MCQs on wide screen for better experience.

REQUEST

  1. Please rate the quiz and give us feedback once you completed the quiz.
  2. Share with ACCA students on social media such as, Facebook Groups, Whatsapp, Telegram, etc.

1 / 29

A company uses standard marginal costing. Its budgeted contribution for the last month was
$20,000. The actual contribution for the month was $15,000, and the following variances have been calculated:

Sales volume contribution variance $5,000 adverse
Sales price variance $9,000 favourable
Fixed overhead expenditure variance $3,000 favourable

What was the total variable cost variance?

2 / 29

A company purchased 6,850 kgs of material at a total cost of $21,920. The material price variance was $1,370 favourable.

What was the standard price per kg?

$_____ (to two decimal places)

3 / 29

A cost centre had an overhead absorption rate of $4.25 per machine hour, based on a budgeted activity level of 12,400 machine hours.

In the period covered by the budget, actual machine hours worked were 2% more than the budgeted hours and the actual overhead expenditure incurred in the cost centre was $56,389.

What was the total over or under absorption of overheads in the cost centre for the period?

4 / 29

A company uses a standard absorption costing system. Actual profit last period was $25,000, which was $5,000 less than budgeted profit. The standard profit on actual sales for the period was

$15,000. Only three variances occurred in the period: a sales volume profit variance, a sales price variance and a direct material price variance.

Which of the following is a valid combination of the three variances?

Sales volume
profit variance		 Sales price
variance		 Direct material
price variance
(A) $15,000 A $2,000 F $8,000 F
(B) $5,000 A $2,000 A $2,000 F
(C) $15,000 A $2,000 A $8,000 A
(D) $5,000 A $2,000 F $5,000 A

5 / 29

A firm uses standard marginal costing. Last period the following results were recorded:

Actual sales units 5,000
Standard contribution per unit $60
Sales price variance $5,000 Adverse
Sales volume contribution variance $8,000 Favourable

No other variances arose last period.

What was the actual contribution for the period?

6 / 29

A company manufactures a single product. An extract from a variance control report together with relevant standard cost data is shown below.

Standard selling price per unit      $70
Standard direct material cost (5 kg x $2 per kg)      $10 per unit
Budgeted total material cost of sales $2,300 per month
Budgeted profit margin $6,900 per month
Actual results for February
Sales revenue $15,200
Total direct material cost $2,400
Direct material price variance    $800 adverse
Direct material usage variance    $400 favourable

There was no change in inventory levels during the month.

What was the actual usage of direct material during February?

______ kg

7 / 29

Which of the following situations is most likely to result in a favourable selling price variance?

8 / 29

PH Co produces a single product and currently uses absorption costing for its internal management accounting reports. The fixed production overhead absorption rate is $34 per unit. Opening inventories for the year were 100 units and closing inventories were 180 units. The company's management accountant is considering a switch to marginal costing as the inventory valuation basis.

If marginal costing were used, the marginal costing profit for the year, compared with the profit calculated by absorption costing, would be which of the following?

9 / 29

A company uses standard marginal costing to monitor performance. The budgeted profit and budgeted fixed overhead for a month were $25,000 and $12,000 respectively. In the month, the following variances occurred:

   $
Sales volume contribution 1,000 Adverse
Sales price 2,000 Favourable
Total variable costs 4,000 Adverse
Fixed production overhead expenditure    500 Adverse

What was the actual profit for the month?

10 / 29

The standard direct material cost per unit for a product is calculated as follows:

10.5 litres at $2.50 per litre

Last month the actual price paid for 12,000 litres of material used was 4% above standard and the direct material usage variance was $1,815 favourable. No stocks of material are held.

What was the adverse direct material price variance for last month?

11 / 29

A company uses a standard absorption costing system. The following figures are available for the last accounting period in which actual profit was $108,000.

   $
Sales volume profit variance 6,000 adverse
Sales price variance 5,000 favourable
Total variable cost variance 7,000 adverse
Fixed cost expenditure variance 3,000 favourable
Fixed cost volume variance 2,000 adverse

What was the standard profit for actual sales in the last accounting period?

12 / 29

AD Co manufactures and sells a single product, E, and uses a standard absorption costing system.
Standard cost and selling price details for product E are as follows.

$ per unit
Variable cost 8
Fixed cost 2
10
Standard profit 5
Standard selling price 15

The sales volume variance reported for last period was $9,000 adverse.

AD Co is considering using standard marginal costing as the basis for variance reporting in future.

What would be the correct sales volume variance to be shown in a marginal costing operating statement for last period?

13 / 29

Last month a company budgeted to sell 8,000 units at a price of $12.50 per unit. Actual sales last month were 9,000 units giving a total sales revenue of $117,000.

What was the sales price variance for last month?

14 / 29

A company uses standard marginal costing. Last month the standard contribution on actual sales was $10,000 and the following variances arose:

$
Total variable costs variance 2,000 Adverse
Sales price variance          500 Favourable
Sales volume contribution variance 1,000 Adverse

What was the actual contribution for last month?

15 / 29

A company manufactures a single product. An extract from a variance control report together with relevant standard cost data is shown below.

Standard selling price per unit      $70
Standard direct material cost (5 kg x $2 per kg)      $10 per unit
Budgeted total material cost of sales $2,300 per month
Budgeted profit margin $6,900 per month
Actual results for February
Sales revenue $15,200
Total direct material cost $2,400
Direct material price variance    $800 adverse
Direct material usage variance    $400 favourable

There was no change in inventory levels during the month.

What was the sales volume profit variance for February?

16 / 29

The following data relates to one of a company's products.

$ per unit $ per unit
Selling price 27.00
Variable costs 12.00
Fixed costs   9.00
21.00
Profit   6.00

Budgeted sales for control period 7 were 2,400 units, but actual sales were 2,550 units. The revenue earned from these sales was $67,320.

Profit reconciliation statements are drawn up using marginal costing principles.

What sales variances would be included in such a statement for period 7?

17 / 29

A company manufactures a single product. An extract from a variance control report together with relevant standard cost data is shown below.

Standard selling price per unit      $70
Standard direct material cost (5 kg x $2 per kg)      $10 per unit
Budgeted total material cost of sales $2,300 per month
Budgeted profit margin $6,900 per month
Actual results for February
Sales revenue $15,200
Total direct material cost $2,400
Direct material price variance    $800 adverse
Direct material usage variance    $400 favourable

There was no change in inventory levels during the month.

What was the selling price variance for February?

18 / 29

A company uses variance analysis to control costs and revenues.

Information concerning sales is as follows:

Budgeted selling price $15 per unit
Budgeted sales units 10,000 units
Budgeted profit per unit $5 per unit
Actual sales revenue $151,500
Actual units sold 9,800 units

What is the sales volume profit variance?

19 / 29

The following variances occurred last period.

Sales volume contribution $20,000 favourable
Sales price $5,000 adverse
Total variable cost $18,000 favourable
Fixed cost expenditure $12,000 adverse

If the flexed budget contribution was $200,000, what was the actual contribution?

20 / 29

A company calculates the following under a standard absorption costing system.

  1. The sales volume margin variance
  2. The total fixed overhead variance
  3. The total variable overhead variance

If a company changed to a standard marginal costing system, which variances could change in value?

21 / 29

A company uses a standard absorption costing system. Last month budgeted production was 8,000 units and the standard fixed production overhead cost was $15 per unit. Actual production last month was 8,500 units and the actual fixed production overhead cost was $17 per unit.

What was the total adverse fixed production overhead variance for last month?

$_______

22 / 29

A company uses a standard absorption costing system. The following details have been extracted from its budget for April.

Fixed production overhead cost $48,000
Production (units) 4,800

In April the fixed production overhead cost was under absorbed by $8,000 and the fixed production overhead expenditure variance was $2,000 adverse.

What was the actual number of units produced?

_____ units

23 / 29

A company’s actual profit for a period was $27,000. The only variances for the period were:

   $
Sales price 5,000 adverse
Fixed overhead volume 3,000 favourable
Fixed overhead capacity 4,000 favourable
Fixed overhead efficiency 1,000 adverse

What was the budgeted profit for the period?

24 / 29

A company currently uses a standard absorption costing system. The fixed overhead variances extracted from the operating statement for November are:

   $
Fixed production overhead expenditure variance 5,800 adverse
Fixed production overhead capacity variance 4,200 favourable
Fixed production overhead efficiency variance 1,400 adverse

PQ Co is considering using standard marginal costing as the basis for variance reporting in future.

What variance for fixed production overhead would be shown in a marginal costing operating statement for November?

25 / 29

When comparing the profits reported under absorption costing and marginal costing during a period when the level of inventory increased, which of the following is true?

26 / 29

A company manufactures a single product. An extract from a variance control report together with relevant standard cost data is shown below.

Standard selling price per unit      $70
Standard direct material cost (5 kg x $2 per kg)      $10 per unit
Budgeted total material cost of sales $2,300 per month
Budgeted profit margin $6,900 per month
Actual results for February
Sales revenue $15,200
Total direct material cost $2,400
Direct material price variance    $800 adverse
Direct material usage variance    $400 favourable

There was no change in inventory levels during the month.

What was the actual production in February?

______ units

27 / 29

The budgeted contribution for HMF Co for June was $290,000. The following variances occurred during the month.

$
Fixed overhead expenditure variance   6,475 Favourable
Total direct labour variance 11,323 Favourable
Total variable overhead variance 21,665 Adverse
Selling price variance 21,875 Favourable
Fixed overhead volume variance 12,500 Adverse
Sales volume variance 36,250 Adverse
Total direct materials variance   6,335 Adverse

What was the actual contribution for the month?

28 / 29

The standard direct material cost per unit for a product is calculated as follows:

10.5 litres at $2.50 per litre

Last month the actual price paid for 12,000 litres of material used was 4% above standard and the direct material usage variance was $1,815 favourable. No stocks of material are held.

What was the actual production last month (in units)?

29 / 29

A company uses a standard absorption costing system. Last month the actual profit was $500,000. The only variances recorded for the month were as follows:

$'000
Sales volume profit variance 10 adverse
Fixed production overhead capacity variance 30 favourable
Fixed production overhead efficiency variance 40 adverse
Fixed production overhead volume variance 10 adverse
Fixed production overhead expenditure variance 50 favourable
Direct labour efficiency variance 15 adverse

What was the budgeted profit for last month?

Your score is

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