Which of the Following Variances Are Most Similar with Respect

question 64

Multiple Choice

Which of the following variances are most similar with respect to the manner in which they are calculated?

• A) Labor rate variance and labor efficiency variance.
• B) Material price variance and material quantity variance.
• C) Material price variance, material quantity variance, and total material variance.
• D) Material price variance and labor rate variance.
• E) Material price variance and labor efficiency variance.

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Definitions:

Overhead Cost

The ongoing expenses of operating a business that are not directly attributable to creating the product or service, including rent, utilities, and administrative costs.

Activity Cost Pools

A grouping of all the costs associated with a particular activity, used in activity-based costing to allocate costs more accurately.

Departmental Overhead Rates

Ratios used to allocate indirect costs to different departments based on specific criteria, such as labor hours or machine use.

Molding Department

The section in a manufacturing facility where raw materials are shaped into parts through various molding processes.