Which of the Following Variances Are Most Similar with Respect

question 86

Multiple Choice

Which of the following variances are most similar with respect to the manner in which they are calculated?

• A) Labor rate variance and labor efficiency variance.
• B) Material price variance and material quantity variance.
• C) Material price variance, material quantity variance, and total material variance.
• D) Material price variance and labor efficiency variance.
• E) Material quantity variance and labor efficiency variance.

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Definitions:

Traditional Costing

An accounting method that applies indirect costs to products based on a predetermined overhead rate, typically simpler than activity-based costing.

Activity-Based Costing

A costing methodology that assigns the costs of resources to products or services based on activities and processes involved in their production.

Traditional Costing Method

A cost accounting method that assigns overhead costs to products based on a predetermined overhead rate.

Direct Labor-Hours

A measure representing the total hours worked by employees directly involved in the production of goods or services.