Final answer:
The difference between actual and standard cost due to the actual versus standard resource units used is called the Quantity (or efficiency) variance, which is important in managing variable costs like labor and raw materials.
Step-by-step explanation:
The difference described by the student is known as the Quantity (or efficiency) variance. This type of variance measures the cost impact due to the difference between the actual number of resource units consumed and the standard number of resource units anticipated to produce a certain level of output. When discussing variable costs, such as labor and raw materials, they vary with the output; thus, efficiency in using these resources directly affects the company's cost-efficiency and financial performance.
If a company uses more labor hours or materials than expected (more than the standard), it would result in an unfavorable efficiency variance, indicating less efficiency. In contrast, using fewer resource units than the standard would result in a favorable efficiency variance, signifying greater efficiency. Understanding this concept is crucial in management accounting as it helps businesses control costs, allocate resources efficiently, and enhance operational performance. Efficiency variances are especially relevant when considering variable costs that change with the level of production, such as labor or the purchase of raw materials.