Taking Appropriate Action on Variances Includes All of the Following

question 83

Multiple Choice

Taking appropriate action on variances includes all of the following except:

• A)Ignoring the cause of favorable variances.
• B)Revising the standard because it was set incorrectly.
• C)Improving the manufacturing process.
• D)Looking for new suppliers.

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Definitions:

Variable Cost

Costs that vary directly with the level of production or output, such as materials and labor, in contrast to fixed costs, which remain constant regardless of output levels.

Long-Run Average Total Cost Curve

A graphical representation that shows the lowest cost at which a firm can produce any given level of output in the long run, when all inputs are variable.

Output

Output refers to the amount of goods or services produced by a firm or economy within a certain period.

Physical Capital

Consists of tangible, man-made objects that a business uses to produce goods or services, such as buildings, machinery, and equipment.