Production cost variances are input variances,while sales activity variances are output variances.

Question

Quizplus · Accepted Answer

This statement is true. Production cost variances refer to the differences between expected and actual costs of inputs used to produce goods or services, which are input variances. Sales activity variances measure the differences between expected and actual revenues based on the output or sales activity, which are output variances. Costs are based on inputs, which include direct materials, direct labor, and overhead costs, whereas revenues are based on the sales or delivery of the finished product or service, which are outputs.

Production Cost Variances Are Input Variances,while Sales Activity Variances Are