A total variable cost variance (such as for direct materials)can be broken down into separate variances that evaluate:
A)Price and efficiency.
B)Units and cost.
C)Volume and productivity.
D)Sales volume versus sales mix.
E)Efforts and results.

Question

Quizplus · Accepted Answer

A total variable cost variance (such as for direct materials) can be broken down into two separate variances - price variance and efficiency variance. The price variance reflects the difference between the actual price paid for materials and the standard price that should have been paid. The efficiency variance reflects the difference between the actual quantity of materials used and the standard quantity that should have been used. Therefore, option A is the correct answer.

A Total Variable Cost Variance (Such as for Direct Materials)can