Expectancy Theory Contains Three Elements; They Are

question 16

Multiple Choice

Expectancy theory contains three elements; they are:

• A) Expectancy, instrumentality, values
• B) Expectancy, institution, values
• C) Expectancy, instrumentality, valence
• D) Expectancy, institution, variance
• E) Expectancy, instrumentality, variance

---

Definitions:

Variable Overhead Rate Variance

Variable overhead rate variance is the difference between the actual variable overhead costs incurred and the expected (standard) costs, influenced by fluctuations in production activity levels.

Materials Price Variance

The difference between the actual cost of materials and the standard (or expected) cost, indicating how much more or less was spent on materials than was planned.

Labor Rate Variance

The difference between the actual cost of labor and the budgeted cost of labor at the standard rate.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the expected variable overhead based on standard cost accounting.