Which of the following is the correct formula for measuring the efficiency variance?
A) Efficiency Variance = (Actual Quantity + Standard Quantity) - Standard Cost
B) Efficiency Variance = (Actual Quantity × Standard Quantity) / Standard Cost
C) Efficiency Variance = (Actual Quantity / Standard Quantity) × Standard Cost
D) Efficiency Variance = (Actual Quantity - Standard Quantity) × Standard Cost

Question

Quizplus · Accepted Answer

Efficiency variance measures the difference between the actual quantity of inputs used and the standard quantity of inputs that should have been used to produce the actual output. The correct formula for efficiency variance is (Actual Quantity - Standard Quantity) × Standard Cost. This formula takes into consideration the difference between the actual and standard quantity of inputs and multiplies it by the standard cost to determine the efficiency variance.

Which of the Following Is the Correct Formula for Measuring