Which of the Following Correctly Demonstrates the Comparison of the Four-Variance

question 16

Multiple Choice

Which of the following correctly demonstrates the comparison of the four-variance method of factory overhead analysis to the two-variance method of factory overhead analysis?

• A)The sum of the spending and budget variances in the four-variance method is equal to the controllable variance in the two-variance method.
• B)The sum of the budget, spending and efficiency variances in the four-variance method is equal to the controllable variance in the two-variance method.
• C)The sum of the spending, efficiency and volume variances in the four-variance method is equal to the controllable variance in the two-variance method.
• D)The budget variance in the four-variance method is equal to the controllable variance in the two-variance method.

---

Definitions:

Receivables

These are amounts owed to a business by its customers for goods or services delivered on credit.

GAAP

Generally Accepted Accounting Principles, a set of accounting rules and standards used in the United States for preparing financial statements.

IFRS

A collection of worldwide accounting rules for financial reporting, known as International Financial Reporting Standards.

Credit Card Sale

A transaction in which the purchase of goods or services is made using a credit card, allowing customers to delay payment and sellers to receive immediate funds.