Question

A variance is:

A. the required number of inputs for one standard output.
B. the difference between an actual amount and a budgeted or standard amount.
C. the difference between a budgeted amount and a benchmark amount.
D. the gap between a planned amount and a benchmark amount.

Answer 1

B. the difference between an actual amount and a budgeted or standard amount.

Step-by-step explanation:

For example in the price variance for direct materials the variance will be the difference betwene the standard cost and the actual cost of the purchased units.

The labor hour variance will be the difference between the labor hours we expected based on standard and the actual hours needed to obtain the output for the period.