alleryStart learning →Spending exactly the standard amount on materials produces a variance of:
AFavorable size
BUnfavorable one
CUndefined size
DExactly zero
Answer & Solution
Correct answer: D. Exactly zero
1. A variance is defined as a difference.
2. A variance is a difference between the standard and the actual performance.
3. An unfavorable variance involves spending more than the standard.
4. A favorable variance runs the other way.
5. If actual equals standard there is no difference, so the variance is zero.
_Source: OpenStax Principles of Accounting, Volume 2: Managerial Accounting (CC BY-NC-SA 4.0), Ch 8 'Standard Costs and Variances'_
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