Decision Makers Typically Look at Alternatives Sequentially and Compare Each

question 105

True/False

Decision makers typically look at alternatives sequentially and compare each alternative with an implicit favorite.

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Definitions:

Labor Efficiency Variance

The difference between the actual labor hours used and the standard hours expected for the production level achieved.

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the standard quantity expected, multiplied by the standard cost per unit of material.

Standard Material

The predetermined quantity and cost of materials expected to be used in producing a unit of product, used as a benchmark for cost control.

Materials Price Variance

The difference between the actual cost of materials and the expected (standard) cost of materials used in production.