1. Material quantity variance is calculated in:
Process costing
Standard costing
Batch costing
2. The purpose of material quantity variance is to identify differences between material actual and standard quantity used in the production
True
False
3. Material quantity variance is favorable when:
Material actual quantity used < standard quantity
Material actual quantity used > standard cost
4. Favorable material quantity variance arises due to:
Use of less quantity than the standard
Good price negotiation with vendors
All of the above
5. Hike in prices of materials could lead:
Favorable material quantity variance
Adverse material quantity variance
No effect
6. Inefficient buying skills with respect to price negotiation leads to:
Favorable material price variance
Adverse material price variance
No effect
7. Standard cost is based on:
Management’s decision
Auditor’s decision
Store keeper’s decision
8. Material quantity variance is an effective tool of:
Process costing
Standard costing
Budgeting
9. Actual Quantity used 13,666 Kg @ 1.86/kg, while standard quantity 13,334 Kg @ 2/kg. Material Quantity variance will be:
664 favorable
664 adverse