Kelly Company gathered the following information for 2009:

- What is the efficiency variance for Product Y?

Question

Kelly Company gathered the following information for 2009:

- What is the efficiency variance for Product Y?

Quizplus · Accepted Answer

The efficiency variance for Product Y is calculated by comparing the actual quantity of inputs used to produce a certain amount of outputs against the standard (expected) quantity of inputs at the standard cost. A favorable variance indicates that less input was used than expected, while an unfavorable variance indicates more input was used. The choice D, $1,650 favorable, suggests that the actual inputs used were less than the standard inputs expected, leading to a cost saving or efficiency gain of $1,650.

Kelly Company Gathered the Following Information for 2009