Maintaining a Satisfactory Relationship Between an Entity's Resource Inputs and Its

question 46

Multiple Choice

Maintaining a satisfactory relationship between an entity's resource inputs and its output of product or services is referred to as:

• A) planning.
• B) efficiency.
• C) organising.
• D) effectiveness.

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Definitions:

Revenue Volume Variance

The difference between the actual sales revenue received and the expected revenue, based on the budgeted sales volume.

Revenue Price Variance

The difference between the actual revenue generated by selling a product at its current price and the expected revenue at a predetermined price.

Direct Materials Price Variance

Direct materials price variance is the difference between the actual cost of materials and the standard cost, multiplied by the quantity of materials purchased.

Standard Price

A predetermined cost that management expects to pay under normal conditions for a specific quantity of goods or services.