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JAIIB · Accounting & Financial Management · Module D — Cost Management Accounting and Taxation

JAIIB AFM Unit 33 — Standard Costing: Free MCQs with Explanations

By Swarnakshi Jha (ex-banker) · Updated 20 September 2026 · Paper 3 of the November 2026 cycle (28 November 2026)

This page is a free slice of our JAIIB AFM question bank for Unit 33 — Standard Costing (Module D — Cost Management Accounting and Taxation). The Mock Centre holds 56 questions on this unit alone, every one with a why-right / why-wrong explanation; below are the facts examiners keep returning to, five of those questions to try, and the traps that cost marks.

AFM · Module D56 MCQs in the Mock Centre5 free belowPaper on 28 November 2026

Key facts examiners test from this unit

  1. Standard cost = pre-determined/scientifically set cost; variance = actual − standard; management controls COSTS most directly (prices are market-set).
  2. Standards stay valid until the underlying conditions change; classification: ideal / normal-attainable / basic (+ current); industry prefers ATTAINABLE (motivating yet realistic); ideal = perfect-conditions ceiling; basic = long-base reference whose age is its weakness.
  3. Material standards: price + quantity; labour standards: rate + time (time-and-motion or past records); integrated approach ties standards to the whole plan (e.g., standards flowing from the production budget).

5 free practice questions — tap an option

Five basic questions from this unit. Answers lock on the first tap, exactly as in the exam, and a short explanation opens underneath. The Mock Centre adds the moderate and tough questions, why every other option is wrong, the concept capsule and the exam tip — with your score and revision dates tracked.

Question 1 of 5
The difference between actual cost and standard cost is called a:
Why (b): Variance = actual − standard; favourable when actual cost is lower, adverse when higher — the control signal of standard costing.
Question 2 of 5
For MATERIAL, the two standards set are:
Why (b): Material control needs both: how MUCH should be used (usage/quantity standard) and at what RATE (price standard) — matching the two material variances.
Question 3 of 5
Cost variances are broadly divided into:
Why (b): The three cost families — material, labour, overheads — each split further (price/usage, rate/efficiency, expenditure/volume).
Question 4 of 5
A material cost variance can arise from:
Why (d): Price, quantity, mix and quality all move the material cost line — hence the price/usage decomposition (with mix/yield refinements).
Question 5 of 5
'Management by exception' under standard costing means:
Why (b): Standards let the routine run itself; management's scarce time goes to material deviations — the core efficiency of the technique.
0 of 5 answered.

Traps in this unit

Confusable AConfusable BThe difference
Standard costBudgeted costPer-unit yardstick vs total-function plan
Ideal standardAttainable standardPerfect conditions vs realistic-with-effort (industry's choice)
Practise all 56 questions on Unit 33. The free demo opens a slice of every subject with the same explanations; the AFM Online-only pass unlocks all 1,681 AFM questions, the full and module mocks, Smart Revision and the Readiness Score for one year (₹1,299). Not sure where you stand? Take the free 10-question test first.
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← Unit 32: Costing Methods · Unit 34: Marginal Costing → · All AFM units · JAIIB 2026 guide

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Independent study aid — not affiliated with, endorsed by, or sponsored by the Indian Institute of Banking & Finance (IIBF). Exam pattern, dates, fees and passing criteria are set by IIBF — always confirm the current rules at iibf.org.in. Regulatory figures verified as of September 2026; verify from official sources before relying on them in practice.