Management Accounting MCQ Questions and Solutions with Explanations | Management

Answer: Option C

In management control, an efficiency variance is also referred as usage variance. Efficiency variance is the difference between the theoretical amount of inputs required to produce a unit of output and the actual number of inputs used to produce the unit of output. The expected inputs to produce the unit of output are based on models or past experience.

Answer: Option C

Budgeted input quantity = Actual input quantity - Efficiency variance
= 750 - 200 = 550 units.

Answer: Option B

Efficiency variance = (Actual quantity of input - Budgeted quantity of input) × Budgeted price of input
= (250 - 90) units × $70 = $11,200.