An efficiency variance is subtracted from actual input quantity to calculate ___________?
Correct answer: D. budgeted input quantity
- A. actual quantity manufactured
- B. budgeted quantity manufactures
- C. budgeted quantity sold
- D. budgeted input quantity
Explanation
When efficiency variance is expressed in input-quantity terms, subtracting it from actual input gives the standard or budgeted input quantity allowed for the output. Thus, the intended answer is budgeted input 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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