Performance Management MCQ Quiz in मराठी - Objective Question with Answer for Performance Management - मोफत PDF डाउनलोड करा
Last updated on Apr 19, 2025
Latest Performance Management MCQ Objective Questions
Top Performance Management MCQ Objective Questions
Performance Management Question 1:
Hurst Co budgeted to produce 16,000 units of a product and sell 15,000 units. There was no opening inventory. The standard cost per unit of the product is as follows:
| $ | |
| Direct materials | 20 |
| Direct labour | 15 |
| Variable production overheads | 5 |
| Fixed production overheads | 10 |
| 50 | |
| Standard selling price | 80 |
Actual production was 18,500 units and 17,000 units were sold. Actual fixed production overheads were $165,000.
What was the fixed overhead expenditure variance for the period?
Answer (Detailed Solution Below)
Performance Management Question 1 Detailed Solution
The correct option is option 2.
Additional information:
Budgeted fixed overhead expenditure = $10 × 16,000 = $160,000
Expenditure variance = Actual expenditure − budgeted expenditure = $165,000 − $160,000 = $5,000 adverse
Performance Management Question 2:
Which of the following best describes “management by exception”?
Answer (Detailed Solution Below)
Performance Management Question 2 Detailed Solution
The correct option is option 3.
Focusing management reports on areas which require attention and ignoring those which appear to be performing within acceptable limits
Performance Management Question 3:
The standard raw material cost for a unit of production is 2 kg at $4.00 per kg. Purchases for a period were 13,000 kg at an actual cost of $4.50 per kg. Raw material inventory, which is valued at standard cost, increased by $8,000 in the period. Budgeted production for the period was 6,000 units but actual production was only 5,000 units.
What was the raw material usage variance for the period?
Answer (Detailed Solution Below)
Performance Management Question 3 Detailed Solution
The correct option is option 1.
WORKING
Actual production should have used 10,000 kg (5,000 × 2). Raw material inventory increased by 2,000 kg ($8,000/$4), so 11,000 kg of the 13,000 purchased went into production. The material usage variance is therefore (10,000 kg − 11,000 kg) × $4 = $4,000 Adverse.
Performance Management Question 4:
A manufacturing company operates a standard absorption costing system. Last month 25,000 production hours were budgeted and the budgeted fixed production overhead cost was $125,000. Last month the actual hours worked were 24,000 and the standard hours for actual production were 27,000.
What was the fixed production overhead capacity variance for last month?
Answer (Detailed Solution Below)
Performance Management Question 4 Detailed Solution
The correct answer is A.
WORKING
| Capacity variance: | |
| Actual hours | 24,000 |
| Budgeted hours | 25,000 |
| Under capacity (hours) | 1,000 |
| × standard overhead absorption rate (125,000/25,000) | 5 |
| Capacity variance (adverse) | 5,000 |
The capacity variance is adverse because actual hours are less than budgeted hours, which may lead to less overheads being absorbed than expected and under-absorption (loss).
Performance Management Question 5:
Which one of the following is UNLIKELY to be the reason for an adverse material price variance?
Answer (Detailed Solution Below)
Performance Management Question 5 Detailed Solution
The correct option is option 3.
Additional information:
A discount scheme that has not been planned for – this would mean that actual price was less than expected, leading to a favourable price variance. All other options would most likely lead to an adverse price variance.
Performance Management Question 6:
The budgeted selling price of one of C’s range of chocolate bars was $6.00 per bar. At the beginning of the budget period market prices of cocoa increased significantly and C decided to increase the selling price of the chocolate bar by 10% for the whole period. C also decided to increase the amount spent on marketing and as a result actual sales volumes increased to 15,750 bars which was 5% above the budgeted volume. The standard contribution per bar was $2.00. However, a contribution of $2.25 per bar was actually achieved.
How much was the favourable sales volume contribution variance for the period
Answer (Detailed Solution Below)
Performance Management Question 6 Detailed Solution
The correct option is option 1.
Additional information:
Sales volume contribution variance = (15,750 − 15,000) × $2.00 = $1,500 Favourable
Budgeted sales were 15,750/1.05 = 15,000 units
Performance Management Question 7:
Moony budgeted to make 50,000 units of its sole product, the koa. Fixed overheads are absorbed on the basis of $8 per hour for 2 labour hours.
The actual production of the koa was 52,000 units, which took 102,500 labour hours to manufacture. Total fixed overheads were $810,000.
What was the fixed overhead capacity variance?
Answer (Detailed Solution Below)
Performance Management Question 7 Detailed Solution
The correct option is option 3.
| Hrs | ||
| Actual labour hours | 102,500 | |
| Budgeted labour hours (50,000 × 2 hr) | 100,000 | |
| Difference | 2,500 | |
| $ | ||
| × Standard rate per hour | 8 | |
| 20,000 | Fav |
Note: for the fixed overhead capacity variance, having more actual labour hours than budgeted leads to a favourable variance, as the firm has increased capacity to absorb fixed overheads.
Performance Management Question 8:
Moonstar budgeted to manufacture 2,000 units of a product but made 2,100 units. The standard labour cost per unit was $80 (4 hours at $20 per hour). Employees worked 8,100 hours although they were paid for 8,300 hours. The actual labour cost was $164,000.
What was the labour rate variance for Moonstar?
Answer (Detailed Solution Below)
Performance Management Question 8 Detailed Solution
The correct answer is option 3.
| $ | ||
| Actual amount paid | 164,000 | |
| Hours paid at standard rate (8,300 × $20) | 166,000 | |
| 2,000 | Fav |
Performance Management Question 9:
A company operates a standard marginal costing system. Last month actual fixed overhead expenditure was 2% below budget and the fixed overhead expenditure variance was $1,250.
What was the actual fixed overhead expenditure for last month?
Answer (Detailed Solution Below)
Performance Management Question 9 Detailed Solution
The correct answer is A.
Budgeted overhead − actual overhead = $1,250 (this is the fixed overhead expenditure variance)
Budgeted overhead = $1,250 ÷ 0.02 = $62,500 (because actual overhead was $1,250 below budget, and 2% below budget)
Actual overhead = $62,500 − $1,250 = $61,250
Performance Management Question 10:
Jessie Co manufactures a single product. The following estimates of costs have been made for various level of production of the product.
| Production (units) | 50,000 | 70,000 | 100,000 |
| $000 | $000 | $000 | |
| Variable | 3,655 | 5,117 | 7,310 |
| Fixed | 3,452 | 3,452 | 3,452 |
In addition to the costs listed above, $380,000 of incremental costs will be incurred for every complete 20,000 units produced.
What is the budgeted total production cost if production is budgeted to be 85,000 units?
Answer (Detailed Solution Below)
Performance Management Question 10 Detailed Solution
The correct option is option 3.
Variable cost per unit = $7,310,000/100,000 = $73.10 (or calculate as $5,117,000/70,000).
Incremental costs incurred at 85,000 units is 4 increments of 20,000.
Therefore, total production cost = ($73.10 × 85,000) + $3,452,000 + ($380,000 × 4) = $11,185,500
Tutorial note: The question will indicate the number of fixed cost increments. In this case, the cost occurs after 20,000 units are completed, so a production level of 85,000 units incurs four increments.