In a Standard Cost Variance Report

question 6

Multiple Choice

In a standard cost variance report,

• A)the largest unfavourable variance is the one that will impact on the company the most.
• B)the largest positive variance can be scanned and cleared the quickest.
• C)the trend or pattern of variances on a period-to-period basis should be monitored.
• D)management must set predetermined variance limits that will dictate what variances must be investigated.

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Definitions:

Test Statistic

A calculated value used in statistical hypothesis testing to compare against a critical value to decide whether to reject the null hypothesis.

T Value

A statistic calculated in a T-test that measures the size of the difference relative to the variation in your sample data.

Homogeneity-of-Variance

The assumption that different samples in a study have the same variance or variability, often checked before applying certain statistical tests.

T Test

A statistical test used to compare the means of two groups and determine if there are statistically significant differences between them.