Which of the following variances is least likely to provide useful information for making decisions, if calculated as part of a comprehensive set of variances?
A) Variable overhead spending
B) Production volume variance
C) Direct material price
D) Direct labour efficiency

Question

Quizplus · Accepted Answer

The production volume variance is least likely to provide useful information for making decisions because it measures the difference between the budgeted level of production and the actual level of production. This variance is largely outside the control of managers and may not reflect actual performance. The other variances listed (variable overhead spending, direct material price, and direct labour efficiency) all directly measure the efficiency of input usage and can be used to identify areas for improvement and make decisions to increase profitability.

Which of the Following Variances Is Least Likely to Provide