Chapter 10
Variance Analysis—A Tool for Cost Control
and Performance Evaluation
Multiple Choice
1. (LO 1—Standard cost)
2. (LO 2—Flexible versus static budgets)
Answer: C
3. (LO 2—Flexible budget: calculation of net income)
Answer: D
4. (LO 3—Flexible budget variance)
5. (LO 3—Sales price variance)
Answer: C
Solutions to Multiple Choice
MC10–2
6. (LO 5—Direct materials price variance)
7. (LO 5—Direct materials usage variance)
8. (LO 6—Direct labor rate variance)
9. (LO 6—Direct labor efficiency variance)
10. (LO 7—Variable overhead spending variance)
11. (LO 7—Variable overhead efficiency variance)
12. (LO 8—Fixed overhead variances)