The difference between standard and actual cost per unit of input is measured by:
A) the raw materials price variance.
B) the direct labor rate variance.
C) the variable overhead spending variance.
D)all of the above.

Question

Quizplus · Accepted Answer

The difference between standard and actual cost per unit of input can be measured by all of the variances mentioned in the options. The raw materials price variance measures the difference between the actual cost of raw materials and the standard cost of raw materials per unit of input. The direct labor rate variance measures the difference between the actual hourly wage rate paid to direct labor and the standard hourly wage rate per unit of input. The variable overhead spending variance measures the difference between the actual variable overhead cost incurred and the standard variable overhead cost per unit of input. Therefore, option D, all of the above, is the best choice.

The Difference Between Standard and Actual Cost Per Unit of Input