Which term describes the result of multiplying the difference between the actual quantity used and the standard input quantity for output by the budgeted price?

Multiple choice question for Direct Cost Variances and Management Control. Select an option, then review the explanation below.

Explanation

The efficiency variance is calculated by taking the difference between the actual quantity used and the standard input quantity allowed for the output, then multiplying that difference by the budgeted price. This measures how efficiently resources were used.

Practice related questions from the same subject.

1.Within the hierarchy of costing and budgeting, which of the following represents a product sustaining cost?
2.Given that the actual cost of a material is $700 while the planned cost was $900, what type of variance is observed?
3.Given that the actual outcome is $65,000 and the static budget variance amounts to $35,000, what is the value of the static budget?
4.What term is used to describe the anticipated performance of a company?
5.Given that the actual labor cost is $1200 while the planned labor cost is $1000, what is the nature of the labor price variance?

Which term describes the result of multiplying the difference between the actual quantity used and the standard input quantity for output by the budgeted price?

Explanation

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