1. Material price variance is calculated in:
Process costing
Standard costing
Batch costing
2. The purpose of material price variance is to identify differences between material actual and standard cost
True
False
3. Material price variance is favorable when:
Material actual cost < standard cost
Material actual cost > standard cost
4. Favorable material price variance arises due to:
Purchase of low quality material than the standard
Decrease in the value of raw materials
Good price negotiation with vendors
All of the above
5. Purchase discount on bulk orders leads due:
Favorable material price variance
Adverse material price variance
No effect
6. Hike in prices of materials could lead:
Favorable material price variance
Adverse material price variance
No effect
7. Inefficient buying skills with respect to price negotiation leads to:
Favorable material price variance
Adverse material price variance
No effect
8. If material standard cost is $ 26,668/- & actual cost $ 25,419, the material price variance will be:
1913 adverse
1913 favorable
1249 favorable
9. Standard cost is based on:
Management’s decision
Auditor’s decision
Store keeper’s decision
10. Material price variance is an effective tool of:
Process costing
Standard costing
Budgeting