1
ACCT 2300-Final Exam Questions with Correct
Answers | Updated (100% Correct Answers)
cost standards Answer: specify how much should be paid for each unit of the
input (ie. DM or DL)
quantity standards Answer: specify how much of an input should be used to
make a product or provide a service
standards Answer: benchmarks or 'norms' for measuringperformance.
standard cost card Answer: a detailed listing of the standards that should go into
making a unit of product
Variance Answer: difference between the actual results and standards
-Any deviations from standard (i.e., variances) that aredeemed significant are
bought to the attention ofmanagement for further investigation
Price and quantity variances are determined separately for two reason? Answer:
1. Different managers are usually responsible for buyingand for using the inputs.
For example, the purchasin gmanagers is responsible for the price paid to
purchas edirect materials where as the production manager is responsible for the
quantity of direct materials used tomake goods
2. The buying and using activities occur at different points in time. For example,
direct material purchases may be held in inventory for a period of time before
being used in production
© 2026 All rights reserved
, 2
Direct Material Price Variance Answer: (AQ x AP) - (AQ x SP)
A stands for actual
Q stands for quantity
P stands for price
S stands for standard
NOTE: The AQ in the DM price variance represents theactual quantity of direct
materials PURCHASED
Direct Material Quantity Variance Answer: AQ x SP) - (SQ x SP)
NOTE: The AQ in the DM quantity variance represents the actual quantity of
direct materials USED IN PRODUCTION
Standard Quantity Answer: (standard quantity of DM per unit x number of units
produced)
Direct Labor Rate Variance Answer: (AH x AR) - (AH x SR)
NOTE: The (AH x AR) component represents the actual cost of direct labor
incurred
-measures the difference between what was actually PAID to the direct laborers
and what should have been paid, according to the standards
Direct Labor Efficiency Variance Answer: (AH x SR) - (SH x SR)
© 2026 All rights reserved
ACCT 2300-Final Exam Questions with Correct
Answers | Updated (100% Correct Answers)
cost standards Answer: specify how much should be paid for each unit of the
input (ie. DM or DL)
quantity standards Answer: specify how much of an input should be used to
make a product or provide a service
standards Answer: benchmarks or 'norms' for measuringperformance.
standard cost card Answer: a detailed listing of the standards that should go into
making a unit of product
Variance Answer: difference between the actual results and standards
-Any deviations from standard (i.e., variances) that aredeemed significant are
bought to the attention ofmanagement for further investigation
Price and quantity variances are determined separately for two reason? Answer:
1. Different managers are usually responsible for buyingand for using the inputs.
For example, the purchasin gmanagers is responsible for the price paid to
purchas edirect materials where as the production manager is responsible for the
quantity of direct materials used tomake goods
2. The buying and using activities occur at different points in time. For example,
direct material purchases may be held in inventory for a period of time before
being used in production
© 2026 All rights reserved
, 2
Direct Material Price Variance Answer: (AQ x AP) - (AQ x SP)
A stands for actual
Q stands for quantity
P stands for price
S stands for standard
NOTE: The AQ in the DM price variance represents theactual quantity of direct
materials PURCHASED
Direct Material Quantity Variance Answer: AQ x SP) - (SQ x SP)
NOTE: The AQ in the DM quantity variance represents the actual quantity of
direct materials USED IN PRODUCTION
Standard Quantity Answer: (standard quantity of DM per unit x number of units
produced)
Direct Labor Rate Variance Answer: (AH x AR) - (AH x SR)
NOTE: The (AH x AR) component represents the actual cost of direct labor
incurred
-measures the difference between what was actually PAID to the direct laborers
and what should have been paid, according to the standards
Direct Labor Efficiency Variance Answer: (AH x SR) - (SH x SR)
© 2026 All rights reserved
