The Two Basic Reasons for Variance Are

question 19

Multiple Choice

The two basic reasons for variance are

• A)estimates of error and measuring instruments
• B)robustness and power
• C)simple statistics and poor understanding of statistical assumptions
• D)measurement inaccuracy and true differences between measurements

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Definitions:

Raw Materials Inventory

The stock of basic materials that are required to manufacture goods, held by a company awaiting to be used in the production process.

Raw Materials Purchases

Refers to the total cost of all raw materials bought by a company over a specific period for use in its production process.

Standard Cost System

A cost accounting system that uses standard costs for materials, labor, and overhead to control and reduce costs.

Work in Process

Partially finished goods that are still in the production process at the end of an accounting period.