The Systematic Examination of the Differences Between Planned and Actual

question 129

Multiple Choice

The systematic examination of the differences between planned and actual contribution margin is

• A) gross profit analysis
• B) contribution margin analysis
• C) sales mix analysis
• D) volume variance analysis

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Definitions:

Direct Labor Rate Variance

The difference between the actual cost of direct labor and the expected (or budgeted) cost, based on standard rates and actual hours worked.

Actual Costs

The real financial expenditures that a company incurs, as opposed to budgeted or estimated costs.

Standard Materials Quantity

The predetermined amount of materials expected to be used in the production of a single unit or a batch of product, under normal conditions.

Direct Labor Hour

A measure of the labor time specifically involved in the direct manufacture of products, not including indirect tasks.