Cost Accounting Executive Interview Questions and Answers

Purchase price variance is the difference between the actual cost of materials purchased and the standard cost of materials expected to be purchased.

• Purchase price variance helps in analyzing the difference between the actual cost of materials purchased and the standard cost set for those materials.

• It is calculated by multiplying the difference in price per unit by the actual quantity purchased.

• A favorable purchase price variance occurs when materials are purchased at a lower...read more

Standard costing is a cost accounting method where costs are predetermined and compared to actual costs to analyze variances.

• Standard costing involves setting predetermined costs for direct materials, direct labor, and overhead.

• Actual costs are then compared to these predetermined costs to identify any variances.

• Variances can be analyzed to understand the reasons for deviations from standard costs.

• Standard costing helps in cost control, performance evaluation, and decision-ma...read more