1.Rate variance is a part of
Material variance
Labour variance
Overhead variance
2.Rate variance arises due to:
Change in the rate of pay to labours
Change in the price of materials
Change in the quantity of materials
3.Rate variance is obtained using the following formula:
Difference in rates x Actual hours worked
Difference in rates x Standard hours
Difference in rates x Idle Time
4.Favorable rate variance means that:
Actual labor cost is greater than standard cost
Actual labor cost is less than standard cost
None of the above.
5.Adverse rate variance might arise due to:
Increase actual cost than anticipated
Incorrect standard was setup
All of the above.
6.Overtime to complete the production may lead to:
Adverse material variance
Adverse rate variance
Favorable rate variance
7.Increased promotion to higher pay level staff leads to:
Adverse material variance
Adverse rate variance
Favorable rate variance
- Standard cost: Labour 20,000 hours @ $2.66 per hour = $53,200/-; Actual cost: Labour 19,866 hours @ $2.84 per hour = 56,420/-. Rate variance will be:
$ 3,576 favorable
$ 3,500 adverse
$ 3,576 adverse
9.Rate variance is used to evaluate the performance of human capital:
True
False
10.Rate variance is an effective tool to negotiate pay terms with employees and labor union.
Yes
No