The difference between actual quantity and budgeted quantity of cost allocation base is classified as __________?
Correct answer: B. variable overhead efficiency variance
- A. fixed overhead efficiency variance
- B. variable overhead efficiency variance
- C. variable overhead manufacturing variance
- D. fixed overhead manufacturing variance
Explanation
A difference between actual and budgeted quantities of the allocation base measures efficiency in using that base. For variable overhead, this is called variable overhead efficiency variance.
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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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