If a Variance Analysis Shows That Operations Are Better Than

question 48

Multiple Choice

If a variance analysis shows that operations are better than expected, managers should:

• A) Do nothing
• B) Revise standard costs to make them harder to achieve
• C) Monitor quality to ensure it was maintained
• D) Change the accounting records so that unrealistic expectations aren't imposed in future

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Definitions:

Inputs

Resources used in the production process, such as labor, capital, and materials.

Total Output

The total quantity of goods or services produced by an individual, firm, or country over a specified period.

Production Function

A mathematical model that describes the relationship between the inputs used in production and the output of goods or services.

Inputs

Resources, such as labor, materials, and capital, that are used in the production process to create goods and services.