1. Standard costing provides which of the following?

1. Targets and measures of performance
2. Information for budgeting
3. Simplification of inventory control systems
4. Actual future costs

1. (i), (ii) and (iii) only
2. (ii), (iii) and (iv) only
3. (i), (iii) and (iv) only
4. (i), (ii) and (iv) only

2. 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

The fixed overhead variances for the period were

Fixed overhead Fixed overhead

expenditure variance volume variance

1. $700 (F) $3,200 (F)
2. $700 (F) $3,200 (A)
3. $700 (A) $3,200 (F)
4. $700 (A) $3,200 (A)

3. Which of the following statements is correct?

1. An adverse direct material cost variance will always be a combination of an adverse material pricevariance and an adverse material usage variance
2. An adverse direct material cost variance will always be a combination of an adverse material pricevariance and a favourable material usage variance
3. An adverse direct material cost variance can be a combination of a favourable material price varianceand a favourable material usage variance
4. An adverse direct material cost variance can be a combination of a favourable material price varianceand an adverse material usage variance