A Variance Can Best Be Described As

question 97

Multiple Choice

A variance can best be described as:

• A) benchmarks common to other firms in the same industry.
• B) differences between planned results and actual results.
• C) useful for performance evaluations but not making decisions.
• D) generally accepted accounting principles when standards are used.

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Definitions:

Conversion Costs

Costs incurred to convert raw materials into finished goods, typically including direct labor and manufacturing overhead.

Equivalent Units

A concept in cost accounting used to approximate the amount of finished goods produced from partially completed goods.

First Processing Department

The initial stage or section in a manufacturing or processing facility where raw materials begin their transformation into finished products.

FIFO Method

"First in, first out" method; an inventory valuation technique where the costs of the earliest goods acquired are the first to be recognized in cost of goods sold.