1. Which of the given is not true about variances in general?

a. Total variance is difference between budgeted cost for budgeted activity level and actual cost a that level

b. Total variance can be decomposed into usage and price variances.

c. Performance report shows the total variance for various costs

d. All of these statements are true about variances.

2. Which of the given is not true about presently attainable standards?

a. they are based on efficiently operating work force

b. they are based on ideal conditions

c. they permit for downtime and rest periods

d. they are based on present production processes and technology

3. Which statement about selection of standards is true?

a. Ideal standards tend to extract higher performance levels as they give employees something to live up to.

b. Presently attainable standards may encourage operating inefficiencies.

c. Presently attainable standards discourage employees from achieving their full performance potential.

d. Ideal standards demand maximum efficiency, which may leave workers frustrated, therefore causing a decline in performance.

4. Which budget is essential to determine standard variances?

a. static budget

b. flexible budget

c. both static and flexible budget

d. neither budget is essential

5. When should variances be investigated?

a. when they fall out of the accepted range or the control limit

b. when the variances are unfavorable

c. when the variances are over $10,000

d. all variances should be investigated