The Matrix Approach to Variance Analysis

question 7

Multiple Choice

The matrix approach to variance analysis

• A) will yield slightly different variances than the formula approach.
• B) is more accurate than the formula approach.
• C) does not separate the price and quantity variance calculations.
• D) provides a convenient structure for determining each variance.

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Definitions:

Employee Hours

Employee hours track the amount of labor time worked by employees, used for payroll, scheduling, and operational efficiency analyses.

Square Feet

A unit of area measurement used primarily in the United States, equal to the area of a square with sides of one foot.

Direct Method

A method of preparing the cash flow statement where major classes of gross cash receipts and gross cash payments are disclosed, providing a clear view of cash flow from operating activities.

Service Department

A division within a company responsible for providing support, maintenance, or other services to customers or other departments.