Which of the Following Is Not a Reason Standard Costs

question 142

Multiple Choice

Which of the following is not a reason standard costs are separated into two components?

• A) The price and quantity variances need to be identified separately to correct the actual major differences.
• B) Identifying variances determines which manager must find a solution to major discrepancies.
• C) If a negative variance is overshadowed by a favorable variance, managers may overlook potential corrections.
• D) Variances bring attention to discrepancies in the budget and require managers to revise budgets closer to actual results.

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Definitions:

Agent

An individual or entity authorized to act on behalf of another person or entity, known as the principal, in various transactions or negotiations.

Fiduciaries

Individuals or organizations entrusted to manage assets or decisions for another party, often with a legal obligation to act in the latter's best interest.

Principals

The main parties involved in a transaction or contract, including those who have the authority to make decisions and agreements.

Employers

Employers are individuals or organizations that hire and pay people to work for them, providing compensation in the form of wages or salary in exchange for their labor or services.