Fundamentals of Cost Accounting 3rd Edition by William N. Lanen, Shannon W. Anderson, Michael Maher

Exercise 8

Why is there no efficiency variance for revenues?

Step 1 of 2

The efficiency variance is the difference between standard cost of actual quantity sold and standard cost of standard quantity. The efficiency variance is only computed for costs.

The sales activity variance is computed by the difference between actual sales and budgeted sales which shows the difference between budgeted profit and actual profit earned.