The Primary Benefit of ABC Is It Provides

question 1

Multiple Choice

The primary benefit of ABC is it provides

• A)faster management decisions.
• B)enhanced control over overhead costs.
• C)more cost pools.
• D)more accurate product costing.

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Definitions:

Time Variance

The gap between the time actually needed to accomplish a task and the time that was anticipated for it.

Rate Variance

The difference between the expected rate of return on a project or investment and the actual rate achieved.

Total Direct Labor Cost Variance

The difference between the actual cost of direct labor used in production and the expected (or standard) cost.

Materials Price Variance

The difference between the actual cost of materials and the expected cost at standard prices, indicating how much was saved or overspent.