How Is the Sample Variance Computed Differently from the Population

question 73

Multiple Choice

How is the sample variance computed differently from the population variance?

• A) Only one formula includes a computation for SS.
• B) The calculation in the numerator is different.
• C) The calculation in the denominator is different.
• D) None of these; the sample variance and population variance are computed the same.

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Definitions:

Ideal Standards

Benchmark levels of performance set under perfect operating conditions, used for budgeting and measuring efficiency.

Materials Price Variance

The difference between the actual cost of materials and the standard or expected cost.

Standard Costs

Predetermined costing used in budgeting and decision-making, representing an expected cost under normal conditions.

Overhead Volume Variance

The difference between the budgeted overhead based on standard hours allowed and the actual overhead incurred, due to differences in activity levels.