When Computing Variances from Standard Costs,the Difference Between Actual and Standard

question 108

Multiple Choice

When computing variances from standard costs,the difference between actual and standard price multiplied by actual quantity used yields a

• A)combined price-quantity variance.
• B)price variance.
• C)quantity variance.
• D)mix variance.

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Definitions:

Indirect Materials

Supplies used in the production process that are not directly part of the final product, such as lubricants for machines.

Direct Labor Hours

The total number of hours worked by employees who are directly involved in the production process of goods or services.

Decentralized Operations

A business structure where decision-making is distributed among various levels or locations rather than concentrated at a single point.

Responsibility Accounting

A system of accounting that collects, summarizes, and reports financial information relating to the responsibilities of individual managers.