XYZ Company Uses Standard Costs for Allocating Costs to Work-In-Process

question 19

Multiple Choice

XYZ Company uses standard costs for allocating costs to work-in-process and finished goods inventory.For the last few months,there have been high variances between total standard costs and actual costs.What is one of the likely reasons for this variance?

• A)The accounting department has been developing the costs.
• B)Production quantities are different than expected.
• C)There is an increase in inventory quantities on hand.
• D)The receiving department has been stockpiling raw materials.

---

Definitions:

Qualitative Variables

Variables that express descriptive, non-numerical qualities or categories.

Indicator Variables

Indicator variables, also known as dummy variables, are numeric variables used in statistical models to represent categorical data, with values typically 0 or 1 indicating the absence or presence of a characteristic.

Regression Model

A regression model is a statistical approach used to describe the relationship between a dependent variable and one or more independent variables.

Multiple Regression

A statistical technique that models the relationship between a dependent variable and two or more independent variables.