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

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

These multiple-choice questions (MCQs) are designed to help ACCA F2 (MA) students to better understand the exam format. We aim to instill in students the habit of practicing online for their CBE exams. By doing so, students can reduce exam stress and prepare more effectively.

INFORMATION ABOUT THESE MCQs Test

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

Benefits of Practicing Online on AGlobalBox.com

  1. Authentic Exam Experience:
    Practicing online allows ACCA students to experience an environment closely resembling the actual exam. The MCQs on our platform are designed to mirror the format, difficulty level, and question types found in ACCA exams. This familiarity helps students become more comfortable and confident when facing the real exam.
  2. Comprehensive Question Bank:
    We provided comprehensive question banks covering various topics across the syllabus. By practicing online, students gain access to a wide range of MCQs that thoroughly test their knowledge and understanding in each area.
  3. Enhanced Learning and Retention:
    The interactive nature of online practice enhances learning and improves information retention. Students can actively engage with the MCQs, select answers, and receive immediate results. This approach aids in reinforcing concepts and identifying areas that require further study, thereby maximizing learning outcomes.
  4. Time Management Skills:
    Practicing online helps students develop essential time management skills required for ACCA exams. By adhering to time limits while answering MCQs, students learn to allocate their time effectively and improve their speed and accuracy. This skill is invaluable for completing the actual exam within the given time constraints.
  5. Performance Tracking and Progress Evaluation:
    Students can monitor their results, track their strengths and weaknesses, and identify areas that need improvement.

Number of the Questions

There are 19 Questions in this F2 MCQ Test that cover Chapter 14a; Cost variances of ACCA F2 (MA/FMA) Management Accounting Module.

Time

This MCQs test is not time-bound. Take your time and solve them without stress. Pay proper attention and focus. Do not rush or hesitate.

Result

Students will get their F2 CBE MCQ result after they finish the entire test. They will also be able to see the score in percentage, correct and incorrect answers, as well as explanations for the incorrect questions.

Types of Questions

MCQs: Choose one from the given options.
Multiple choice: Choose all answers that seem correct or incorrect, as per the requirement of the question. Keep your eye on the wording “(select all those which are correct/ or incorrect)”.
Dropdown: 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 14 - Part A - MCQs

Course: ACCA - FIA
Subject:
F2 (MA/FMA) Management Accounting
Chapter: 14 - Cost variances, and 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

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1 / 48

Which of the following statements is correct?

2 / 48

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?

3 / 48

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

4 / 48

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

5 / 48

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?

$_______

6 / 48

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?

7 / 48

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)

8 / 48

Extracts from a company's records from last period are as follows.

Budget Actual
Production 1,925 units 2,070 units
Variable production overhead cost $11,550 $14,904
Labour hours worked 5,775 8,280

What are the variable production overhead variances for last period?

9 / 48

A company has a budgeted material cost of $125,000 for the production of 25,000 units per month. Each unit is budgeted to use 2 kg of material. The standard cost of material is $2.50 per kg.

Actual materials in the month cost $136,000 for 27,000 units and 53,000 kg were purchased and used.

What was the adverse material price variance?

$_______

10 / 48

A company expected to produce 200 units of its product, the Bone, in 20X3. In fact 260 units were produced. The standard labour cost per unit was $70 (10 hours at a rate of $7 per hour). The actual labour cost was $18,600 and the labour force worked 2,200 hours although they were paid for 2,300 hours.

What is the direct labour efficiency variance for the company in 20X3?

11 / 48

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?

12 / 48

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)?

13 / 48

Which of the following would help to explain a favourable direct labour efficiency variance?

  1. Employees were of a lower skill level than specified in the standard
  2. Better quality material was easier to process
  3. Suggestions for improved working methods were implemented during the period

14 / 48

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?

15 / 48

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?

16 / 48

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?

17 / 48

The following information relates to labour costs for the past month:

Budget Labour rate $10 per hour
Production time 15,000 hours
Time per unit 3 hours
Production units 5,000 units
Actual Wages paid $176,000
Production 5,500 units
Total hours worked 14,000 hours

There was no idle time.

What were the labour rate and efficiency variances?

18 / 48

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?

19 / 48

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?

20 / 48

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?

21 / 48

Number of units produced 2,200 2,000
Budget Actual
$ $
Direct materials 110,000 110,000
Direct labour 286,000 280,000
Variable overhead 132,000 120,000

The actual number of units produced was 2,000.

What was the total direct labour variance?

22 / 48

A company has a budgeted material cost of $125,000 for the production of 25,000 units per month. Each unit is budgeted to use 2 kg of material. The standard cost of material is $2.50 per kg.

Actual materials in the month cost $136,000 for 27,000 units and 53,000 kg were purchased and used.

What was the favourable material usage variance?

23 / 48

The costs below relate to the month of June.

Fixed budget Flexed budget Actual
2,200 units 2,000 units 2,000 units
Total direct materials $165,000 $150,000 $140,000

What was the total direct material variance?

24 / 48

A company manufactures a single product, and relevant data for December is as follows.

Budget/standard Actual
Production units 1,800 1,900
Labour hours 9,000 9,400
Fixed production overhead $36,000 $39,480

What are the fixed production overhead capacity and efficiency variances for December?

25 / 48

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?

26 / 48

Number of units produced 2,200 2,000
Budget Actual
$ $
Direct materials 110,000 110,000
Direct labour 286,000 280,000
Variable overhead 132,000 120,000

The actual number of units produced was 2,000.

What was the total direct materials variance?

27 / 48

Which of the following statements are true?

  1. The fixed overhead volume capacity variance represents part of the over/under absorption of overheads
  2. A company works fewer hours than budgeted. This will result in an adverse fixed overhead volume capacity variance

28 / 48

Number of units produced 2,200 2,000
Budget Actual
$ $
Direct materials 110,000 110,000
Direct labour 286,000 280,000
Variable overhead 132,000 120,000

The actual number of units produced was 2,000.

What was the total direct variable overheads variance?

29 / 48

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

30 / 48

A company manufactures a single product L, for which the standard material cost is as follows.

$ per unit
Material 14 kg x $3 42

During July, 800 units of L were manufactured, 12,000 kg of material were purchased for $33,600, of which 11,500 kg were issued to production.

SM Co values all inventory at standard cost.

What are the material price and usage variances for July?

31 / 48

A company expected to produce 200 units of its product, the Bone, in 20X3. In fact 260 units were produced. The standard labour cost per unit was $70 (10 hours at a rate of $7 per hour). The actual labour cost was $18,600 and the labour force worked 2,200 hours although they were paid for 2,300 hours.

What is the direct labour rate variance for the company in 20X3?

32 / 48

A company has budgeted to make and sell 4,200 units of product X during the period.

The standard fixed overhead cost per unit is $4.

During the period covered by the budget, the actual results were as follows.

Production and sales             5,000 units
Fixed overhead incurred $17,500

What are the fixed overhead variances for the period?

33 / 48

A manufacturing company operates a standard absorption costing system. Last month 25,000 production hours were budgeted and the budgeted fixed production overhead cost was $125,000. Last month the actual hours worked were 24,000 and the standard hours for actual production were 27,000.

What was the fixed production overhead capacity variance for last month?

34 / 48

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?

35 / 48

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?

36 / 48

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

37 / 48

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?

38 / 48

Which of the following statements are true?

  1. A favourable fixed overhead volume capacity variance occurs when actual hours of work are greater than budgeted hours of work
  2. A labour force that produces 5,000 standard hours of work in 5,500 actual hours will give a favourable fixed overhead volume efficiency variance

39 / 48

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?

40 / 48

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?

41 / 48

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?

42 / 48

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?

43 / 48

The graph below shows the standard fixed overhead cost per unit, the total budgeted fixed overhead cost and the actual fixed overhead cost for the month of December. The actual number of units produced in June was 2,500 units.

What is the total fixed overhead variance?

44 / 48

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

45 / 48

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?

46 / 48

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?

47 / 48

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?

48 / 48

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?

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