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32 votes
Actual sales revenue in dollars is 3.5% higher than budgeted, actual sales price is 10% lower than budgeted, actual sales volume in units is 15% higher than budgeted, actual input prices are 5% lower than budgeted, and actual input quantities per unit are 5% lower than budgeted. Characterize input price and input efficiency variances as favorable (F) or unfavorable (U):

User GunnarK
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1 Answer

26 votes
26 votes

Answer:

Input price and input efficiency variances are:

Favorable.

Step-by-step explanation:

The input price is the cost of production. When the actual cost of production (input price) is 5% lower than budgeted, it is a favorable outcome. Similarly, when the input efficiency (that is the quantity of input) is 5% lower than budgeted, it shows a favorable outcome. Therefore, the variances of these input elements (price and efficiency) are all together favorable.

User Kiran Babu
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