In management control, an efficiency variance is also referred as __________?
Correct answer: C. usage variance
- A. control variance
- B. uncontrolled variance
- C. usage variance
- D. effective variance
Explanation
Efficiency variance measures the cost effect of using more or fewer input units than the standard quantity allowed, so it is also called usage variance. Price variance, by contrast, measures the effect of paying a different price.
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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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