Suppose the standard for a given cost during a period was $80,000.The actual cost for the period was $72,000.Under what circumstances would you consider the variance from budget to be a positive performance indication?
A)The cost is fixed,and actual production was 90 percent of the standard level of budgeted production.
B)The cost is variable,and the standard cost noted above is the cost at a production level lower than the actual production level.
C)The cost is variable,and actual production was 90 percent of the standard level of production.
D)The cost is variable,and actual production was 75 percent of the standard level of production.

Question

Quizplus · Accepted Answer

When the cost is variable and the standard cost is based on a production level lower than the actual production level, spending less than the standard cost while producing more indicates efficient management and positive performance.

Suppose the Standard for a Given Cost During a Period