Standard Cost Variances Can Be Broken Down Into

question 60

Multiple Choice

Standard cost variances can be broken down into:

• A) price variances
• B) efficiency variances
• C) operating variances
• D) a and b

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Definitions:

Substitution Effect

The change in consumption patterns due to a shift in relative prices, leading consumers to replace more expensive items with cheaper alternatives.

Leisure

Free time spent away from business, work, and domestic chores, often used for relaxation, recreation, or hobbies.

Substitution Effect

The effect of a change in the price of a good or service on the demand for that good or service, due to consumers switching to or from substitutes.

Wages

The fixed regular payment, usually calculated on an hourly, daily, or weekly basis, paid by an employer to an employee for work performed.