Multiple choice

Directions: Choose the correct option for the given question.

Standard cost of labour - Actual cost of labour =

  1. Total labour cost variance

  2. Labour cost ratio

  3. Variance ratio

  4. Either (2) or (3)

  5. None of these
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A Correct answer
Explanation

The difference between the standard cost (what it should have cost) and the actual cost (what it did cost) is defined as the cost variance.

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