If the Actual Quantity of Direct Materials Used in Producing

question 86

Multiple Choice

If the actual quantity of direct materials used in producing a commodity differs from the standard quantity,the variance is termed:

• A)controllable variance.
• B)price variance.
• C)quantity variance.
• D)rate variance.

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Definitions:

Absolute Advantage

The capacity of a nation, person, or company to generate a greater quantity of a product or service than its rivals with an identical level of resources.

Trade

The exchange of goods, services, or both between parties, often involving the transfer of money.

Commodity

A basic good used in commerce that is interchangeable with other goods of the same type; commodities are often used as inputs in the production of other goods or services.

Comparative Advantage

The competency of a country, individual, corporation, or region to manufacture a good or provide a service at a reduced opportunity cost than that of its competition.