Which of the Following Is True About the Variable-Analysis Approach

question 71

Multiple Choice

Which of the following is true about the variable-analysis approach?

• A)Detailed variance analyses are common in small businesses.
• B)Managers use an increased detailed analysis that separates the variable overhead and fixed overhead into a combined overhead.
• C)Managers use a less detailed analysis that combines the variable overhead and fixed overhead into a single overhead.
• D)Managers find more value in doing additional measurements required for comprehensive variance analyses.
• E)The detailed analysis help managers identify and focus only on the areas that are operating as expected.

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Definitions:

Equipment

Tangible property used in the operations of a business, often contributing to the production of goods and services, and generally considered a long-term asset.

Cash

Currency and coins, along with bank balances, checks, and money orders, that are readily available for use.

Expense Account

An account that tracks money spent or costs incurred in an organization's efforts to generate revenue, representing the cost of doing business.

Credit Balance

The amount that appears on the right side of a ledger account, indicating that a liability has increased or an asset has decreased.