The Formula for the Efficiency Variance Is

question 16

Multiple Choice

The formula for the efficiency variance is

• A) (Actual output - Budgeted output)*Budgeted cost/output
• B) ((Actual cost/Actual input) - (Budgeted cost/Budgeted input))*Actual quantity of input used
• C) (Actual inputs/Actual activity - Budgeted inputs/Budgeted activity)*Budgeted cost/input * Actual activities produced
• D) (Actual activity/Actual output - Budgeted activity/Budgeted output)*Budgeted cost per activity*Actual output

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Definitions:

Department's Output

The total amount of goods or services produced by a specific department within a given period.

Direct Materials

Components and primary raw inputs used in the creation of a product, identifiable as integral parts of the finished product.

Direct Labor

The wages or expenses incurred for labor that is directly involved in the manufacturing of a product.

Process

A series of actions or steps taken in order to achieve a particular end in business or manufacturing.