An efficiency variance is 200 units and the actual input quantity is 500 units, then the budgeted input quantity will be __________?
Correct answer: A. 300 units
- A. 300 units
- B. 700 units
- C. 800 units
- D. 500 units
Explanation
Treating the stated efficiency variance as the excess of actual input over budgeted input, the budgeted quantity is 500 − 200 = 300 units. The variance indicates that actual usage exceeded the budgeted quantity.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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