27.The material price variance is calculatedRPCPA, AICPA, CMA & CIA EXAMINATION QUESTIONSPage 19 of 93
MANAGEMENT ADVISORY SERVICESSTANDARD COSTS AND VARIANCE ANALYSISa.The same as the labor rate variance.b.On the quantity of materials bought, not the quantity used.c.On the quantity of materials used, not the quantity bought.d.By multiplying the difference between the actual and standardprice of materials times the quantity of materials used.L & H2.A company recorded the following journal entry when materials were issued to the factory:Work in Process9,000Materials Quantity Variance200Materials8,800Assuming that there was both a price variance and a quantityvariance associated with these materials, this entry indicates thatthe method used for materials price variances is to:16.The most appropriatetime from a control standpoint to record anyvariance of actual materials prices from standard is:24.When the amount for materials inventory in the general ledgerrepresents the actual cost of materials and the materials ledgercards show quantities and dollar values, the materials pricevariance is:3.Variances resulting from materials price changes that are to be passed on to customers are:A.charged to cost of goods soldB.carried as a special credit to inventory accounts C.recorded as ordinary inflation revenueD.allocated to inventories and cost of goods soldE.charged to a special loss accountCIA adaptedMaterials Quantity Variance*.Suppose a standard cost system is being used. What do you callthe variations in the use of materials which can be calculated bycomparing the record of materials withdrawn with the standardconsumption? (E)a.Volume variancec.Efficiency varianceb.Quantity varianced.Price varianceRPCPA 1077
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