What Cost Is the Price of Evaluating Processes and Their

question 48

Multiple Choice

 What cost is the price of evaluating processes and their outputs to ensure that a project is error-free or within an acceptable error range?

• A) prevention cost
• B) appraisal cost
• C) internal failure cost
• D) external failure cost

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Definitions:

Total Materials Variance

The difference between the actual cost of materials used in production and the standard cost of those materials.

Overhead Controllable Variance

Overhead Controllable Variance refers to the difference between the actual indirect operational expenses incurred and the budgeted or expected overhead costs that could be influenced by management decisions.

Total Overhead Variance

The difference between the actual overhead incurred and the standard overhead assigned to production.

Overhead Variances

The difference between actual overhead costs and the standard (or expected) overhead costs for a period.