Which of the following is the correct formula to measure cost variance?
A)Cost Variance = (Actual Cost + Standard Cost)÷ Actual Quantity
B)Cost Variance = (Actual Cost - Standard Cost)× Actual Quantity
C)Cost Variance = (Actual Cost + Standard Cost)+ Actual Quantity
D)Cost Variance = (Actual Cost - Standard Cost)- Actual Quantity

Question

Quizplus · Accepted Answer

Cost variance is calculated as the difference between the actual cost and the standard cost multiplied by the actual quantity. Therefore, the correct formula is Cost Variance = (Actual Cost - Standard Cost)× Actual Quantity, as given in option B.

Which of the Following Is the Correct Formula to Measure