Given a budgeted input price of $50, an actual input quantity of 150 units, and a standard allowed input quantity of 60 units, what is the efficiency variance?

Multiple choice question for Direct Cost Variances and Management Control. Select an option, then review the explanation below.

Explanation

The efficiency variance is calculated by multiplying the difference between actual quantity used and the standard allowed quantity by the budgeted price per unit: (150 - 60) × $50 = 90 × $50 = $4,500. Therefore, the efficiency variance amounts to $4,500.

Practice related questions from the same subject.

1.Within the hierarchy of costing and budgeting, which of the following represents a product sustaining cost?
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3.Given that the actual outcome is $65,000 and the static budget variance amounts to $35,000, what is the value of the static budget?
4.What term is used to describe the anticipated performance of a company?
5.Given that the actual labor cost is $1200 while the planned labor cost is $1000, what is the nature of the labor price variance?

Given a budgeted input price of $50, an actual input quantity of 150 units, and a standard allowed input quantity of 60 units, what is the efficiency variance?

Explanation

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