Cost Variance: Definition, Formula & Analysis


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question 1 of 3

What is the name for the difference between the planned budget and actual amount spent?

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1. Material cost variances can be broken down into what two types of variances?

2. What will you NOT need to know in order to compute the total direct labor variance?

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About This Quiz & Worksheet

You can check your understanding of cost variance and its applications in the business world with this quiz. Questions also review a formula involved with a category of cost variance.

Quiz & Worksheet Goals

Aim to demonstrate your knowledge about:

  • How material cost variances can be broken down
  • Information needed to compute the total direct labor variance
  • Formulas related to the labor variance

Skills Practiced

Skills that this quiz was designed to improve include:

  • Reading comprehension - ensure that you draw the most important information from the related lesson on cost variance
  • Information recall - access the knowledge you've gained regarding the term for any difference between a planned budget and what was actually spent
  • Knowledge application - use your knowledge to answer questions about what can be learned through an analysis of cost variance

Additional Learning

Get ready to learn even more about cost variance with the lesson entitled Cost Variance: Definition, Formula & Analysis. The lesson goes over:

  • How cost variance is involved with a business's budget
  • Formulas for the different categories of cost variance
  • Situations when cost variance analysis is useful