Question

The difference between the Actual cost and the Standard cost for direct labor is called:

Select one:

A. Direct Labor Rate Variance

B. Direct Labor Efficiency Variance

C. Direct Labor Split Variance

D. Direct Labor Flexible Budget Variance

E. None of the above

part 2

The difference between the split cost and the actual cost for direct materials is called the:

Select one:

A. Materials Price Variance

B. Materials Efficiency Variance

C. Materials Usage Variance

D. Materials Budget Variance

E. None of the above

Answer 1

• The difference between the Actual cost and the Standard cost for direct labor is called:

Correct Answer: D. Direct Labor Flexible Budget Variance

           

            Standard cost is calculated for actual units as Actual Units x Standard hours x Standard rate. This Standard cost is also cost used in Flexible Budget.

• The difference between the split cost and the actual cost for direct materials is called the:

Correct Answer: E. None of the above

A. Materials Price Variance – wrong because it’s based on the difference between standard price and actual price.

B. Materials Efficiency Variance – wrong because its based on difference between standard quantity and actual quantity.

C. Materials Usage Variance - wrong because its based on difference between standard quantity and actual quantity.