Which One of the Following Terms Is Most Commonly Used

question 60

Multiple Choice

Which one of the following terms is most commonly used to describe the cash flows of a new project that are simply an offset of reduced cash flows for a current project?

• A)Opportunity cost
• B)Sunk cost
• C)Erosion
• D)Replicated flows
• E)Pirated flows

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Definitions:

Variance Investigation

The process of examining the reasons behind differences between budgeted and actual figures in finance and accounting.

Direct Material Quantity Variance

The difference between the budgeted amount of materials needed for production and the actual amount used, valued at the standard cost.

Cost Standards

Benchmarks or predetermined costs relating to the production of goods or services, serving as a yardstick for measuring actual performance against expected costs.

Direct Material Quantity Variance

The difference between the actual quantity of direct material used and the expected quantity, multiplied by the standard cost per unit.