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

question 61

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

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Definitions:

Coefficient

A numerical or constant factor in a mathematical expression that multiplies the variable it is associated with.

Price Elasticity

The measure of how much the quantity demanded of a good responds to a change in the price of that good, indicating the sensitivity of demand to price changes.

Vertical Straight Line

In the context of graphing, a line that runs straight up and down, parallel to the y-axis, representing an infinite or undefined slope.

Quantity Supplied

The level of a good or service that sellers are eager and able to provide for purchase at a set price over a given period.