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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 2 November 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

Standard cost = pre-determined/scientifically set cost; variance = actual − standard; management controls COSTS most directly (prices are market-set).
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.
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

Which of these causes a material USAGE variance rather than a price variance?

Why (d): Price variance = actual quantity × (standard price − actual price) — a buying matter. Usage variance = standard price × (standard quantity − actual quantity) — a production matter, driven by wastage, spoilage or poor methods.

Question 5 of 5

A firm reports variances only when they exceed ±5% of standard. Under management by exception, a variance of 2% favourable is:

Why (b): Management by exception sets tolerance limits; only significant variances outside them — favourable or adverse — are reported for action, so scarce management time goes where control is needed.

0 of 5 answered.

Traps in this unit

Confusable A	Confusable B	The difference
Standard cost	Budgeted cost	Per-unit yardstick vs total-function plan
Ideal standard	Attainable standard	Perfect 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 1,600+ AFM questions, the full and module mocks, Smart Revision and the Readiness Score for 18 months (₹1,299). Not sure where you stand? Sit the free 120-question mock first (all four papers, questions drawn from pages like this one, real exam screen).

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← Unit 32: Costing Methods · Unit 34: Marginal Costing → · All AFM units · JAIIB 2026 guide

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

Key facts examiners test from this unit

5 free practice questions — tap an option

Traps in this unit

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