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25 October, 13:31

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

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  1. 25 October, 14:24
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    C. Efficiency Variance = (Actual Quantity minus Standard Quantity) times Standard Cost

    Explanation:

    The efficiency variance is the variance in which it shows a difference between the actual and standard quantities and then the difference amount is multiplied with the standard cost

    In mathematically,

    Efficiency Variance = (Actual Quantity - Standard Quantity) * Standard Cost

    Hence, the correct option is C.
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