Which One of the Following Variances Is of Least Significance

question 7

Multiple Choice

Which one of the following variances is of least significance from a behavioral control perspective? (CMA adapted)

• A) Unfavorable materials quantity variance amounting to 20% of the quantity allowed for the output attained.
• B) Unfavorable labor efficiency variance amounting to 10% more than the budgeted hours for the output attained.
• C) Favorable materials price variance obtained by purchasing raw materials from a new vendor.
• D) Fixed factory overhead volume variance resulting from management's decision midway through the fiscal year to reduce its budgeted output by 20%.

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Definitions:

Demand Curve

A graph showing the quantity of a good that consumers are willing and able to purchase at various prices.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a specific price.

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded by consumers, typically downward sloping.

Quantity Demanded

The total amount of a good or service consumers are willing and able to purchase at a specific price level.