The standard price and quantity of direct materials are separated because: (select one of the following)   1) GAAP and IFRS reporting requires separation.   2) Direct materials prices are controlled by the purchasing department and quantity used is controlled by the production department.   3) Standard prices are more difficult to estimate than standard quantities.   4) Standard quantities change more frequently than standard prices.

Q: When the quantity of materials purchased is not equal to the quantity of material used, most…

A: Standard costing means where standard is set for various cost element and actual cost is then…

Q: The purchasing personnel O production marketing department is most likely responsible to incur a…

A: Direct material price variance is the difference between standard price and actual price for the…

Q: explain why GAAP requires full absorption costing (instead of variable costing) if absorption…

A: Introduction:- i)Absorption costing:- Under the absorption costing, The following costs included in…

Q: What distinction must be made when computing the materials price variance vs. the materials quantity…

A: The answer for the theory question on material price and quantity variances is discussed hereunder :…

Q: Why is the direct materials usage variance allocated only to WIP Inventory, Finished Goods…

A: Solution:- Introduction:- The following formula used to calculation as follows:- materials usage…

Q: The material price variance is computed by multiplying the difference between the actual price and…

A: GIVEN   Material Price Variance is the difference between the actual cost of Material purchased and…

Q: Give one reason to explain the materials variances. Give one reason to explain the labor variances.…

A: One possible reason for materials variances is that the quantities of materials used in production…

Q: If raw materials are carried in the raw materials inventory at standard cost, then it is reasonable…

A: 1 Standard data is calculated by considering budgeted data and using actual data. 2…

Q: Which of the following statements is false? Multiple Choice Examples of selling costs include…

A: Costs incurred can be of three types;manufacturing,selling and,administrative.Where manufacturing…

Q: When is the material quantity unfavorable? A.When the actual quantity used is less than the…

A: Material quantity variance =(AQ-SQ)×SP Where as,  AQ = actual quantity used SQ = standard or…

Q: 4. A difference between standard costs for cost control and budgeted costs of the same manufacturing…

A: As per the answer guideline, We are supposed to answer a single question The Standard Cost is the…

Q: Question b Which of the following is a possible cause of an unfavourable materials quantity…

A: Use of inferior raw materials.Explanation:The materials quantity variance measures the difference…

Q: The materials price variance should be computed when materials are purchased. Group of answer…

A: Variance: The difference between the actual cost or price and the budgeted (standard) cost or price…

Q: An unfavorable materials quantity variance indicates that: Multiple Choice standard material price…

A: Unfavorable materials quantity variance means materials has been used more than what was estimated.…

Q: how the purchasing department manager may achieve a favourable direct material pricing variance…

A: Variance analysis: Variance analysis can be defined as the study of difference between the budgeted…

Q: Which of the following material issue pricing method considers the prices as well as the quantities…

A: Solution: "Weighted average method"  considers the prices as well as the quantities of materials…

Q: Which of the following statements is false?   I. Absorption Costing Method differs from Variable…

A: Absorption costing, now and again called “complete costing,” is a managerial accounting approach for…

Q: TRUE OR FALSE When absorption costing is used for external reporting, variable costing can still be…

A: There are various approaches which can be prepared for reporting purpose. Two of which are variable…

Q: Identify  the compliance and/or regulatory issues influencing the  the cost of the products made.…

A: Government and regulatory issues can have a variety of effects on the cost of numerous goods and…

Q: T, F. In order to avoid the transfer of inefficiencies of service departments to operating…

A: Standard Cost: It is the estimated cost of the manufacturing process or a product that is generally…

Q: 1. Which of the following is NOT a key characteristic of Conformance Costs? a) They include expenses…

A: Conformance costs, also known as prevention or appraisal costs, are expenses incurred to ensure…

Q: One disadvantage of activity-based costing is that it cannot be used for external reporting. This is…

A: Introduction Activity based Costing (ABC) is a method of assignment of overhead costs to the…

Q: TRUE OR FALSE In activity-based costing systems, costs are not classified as either direct or…

A: Answer:   In activity-based costing systems, costs are not classified as either direct or indirect…

Q: Direct materials used and Direct labor cost  are incorrect

A: Direct consists of Direct labor, Direct Material. While applied manufacturing overhead is an…

Q: 8) A single indirect-cost rate distorts product costs because A) there is an assumption that all…

A: Answer : Option A " There is an assumption that all support activities affect all products in a…

Q: Differentiate between spoiled and defective material, why costing procedure is different for both?

A: A defective good is a good in which there is a manufacturing fault or defect, but this fault can be…

Q: i) ii) a) b) d) explain the meaning of the term/technique, give two examples of its application,…

A: Cost accounting is one of the branches of accounting that deals with the costing and management of…

Q: Multiple Choice debit to Work in Process, debit to Material Price Variance, credit to Raw Materials…

A: Journal entry A journal entry is a record of the business transactions within the accounting books…

Q: For joint cost allocation: only the net realizable method can be used to allocate joint costs to…

A: Joint Cost Allocation This is generally manufacturing cost which is in joint production process and…

Q: Evergreen Ceramics produces large planters to be used in urban landscaping projects. A special earth…

A: Variance arises when the actual costs is different from the standard costs.  The results are…

Q: (a) Specify whether each cost is a product cost or a period cost. (b) For any costs that were…

A: Product costs are the costs incurred in the manufacturing of product during the period. It is the…

Q: Explain the difference between the cost classifications, ‘production prime costs’ and ‘indirect…

A: Production prime costs are the costs that are directly incurred in the production of goods or…

Q: What features of the cost accounting system would be expected to prevent the omission ofrecording…

A: Cost accounting is the branch of Accountancy associated with the cost of materials used in the…

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance. 

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.