Which of the Following Statements Would Be False Regarding Application

question 71

Multiple Choice

Which of the following statements would be false regarding application of the variance analysis model to nonmanufacturing costs?

• A) The basic framework used for manufacturing is also used for nonmanufacturing costs.
• B) Merchandising and service organizations focus on marketing and administrative costs to measure efficiency and control costs.
• C) The need for analysis of price and efficiency variances in nonmanufacturing settings is increasing.
• D) Service organizations are unable to substitute different types of labor.

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Definitions:

Incremental Processing

A method or process that involves analyzing the additional costs or benefits that arise from producing one additional unit of a product or offering one additional unit of service.

Time Value

The concept in finance that money available now is worth more than the same amount in the future due to its potential earning capacity.

Discounted Cash Flow

Discounted cash flow is a valuation method used to estimate the attractiveness of an investment opportunity based on its expected future cash flows.

Annual Rate of Return

The ratio of gain or loss on an investment across a span of one year, expressed as a percentage.