Variance Analysis Refer to

question 6

Multiple Choice

Variance analysis refer to

• A)calculations of the extent of different kinds of activities
• B)degrees of tolerance limits in manufacturing
• C)an investigation of differences between budget and actual numbers
• D)understanding how a business's performance differs from its competitors

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Definitions:

Optimal Allocation

The most efficient distribution of resources within an economy to maximize the output or welfare.

MB = MC

A principle in economics indicating the optimal level of output or consumption, where the marginal benefit (MB) equals the marginal cost (MC).

Marginal Benefit

The added utility or pleasure that comes from the consumption of one more unit of a good or service.

Marginal Cost

The escalation in aggregate cost linked to the fabrication of an extra item of a good or service.