A Company Using Very Tight (High)standards in a Standard Cost

question 31

Multiple Choice

A company using very tight (high) standards in a standard cost system should expect that

• A)no incentive bonus will be paid.
• B)most variances will be unfavorable.
• C)employees will be strongly motivated to attain the standards.
• D)costs will be controlled better than if lower standards were used.

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Definitions:

Composite Volcano

A volcano composed of layers of hardened lava, tephra, and volcanic ash, typically having a steep profile and explosive eruptions.

Shield Volcano

A broad, domed volcano with gently sloping sides, built by the eruption of fluid basaltic lava.

Fissure

A long, narrow opening or crack, especially one in the ground or in rock formations.

Eruption Column

A rising column of hot gases, tephra, and rock fragments that erupts high into the atmosphere.