If the Total Materials Variance for a Given Operation Is

question 13

Multiple Choice

If the total materials variance for a given operation is favorable, why must this variance be further evaluated as to price and usage?

• A) There is no need to further evaluate the total materials variance if it is favorable.
• B) Generally accepted accounting principles require that all variances be analyzed in three stages.
• C) All variances must appear in the annual report to equity owners for proper disclosure.
• D) A further evaluation lets management evaluate the activities of the purchasing and production functions.

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Definitions:

Glass-Steagall Act

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Office of Management and Budget

A division of the Executive Office of the President in the United States that assists the President in preparing the federal budget and overseeing its administration in Executive Branch agencies.

Mergers

A merger is a financial activity where two or more companies combine to form a new entity, often aiming to increase market share, reduce costs, or expand into new markets.