What Differences Do the Usage Variances Focus On

question 23

Multiple Choice

What differences do the usage variances focus on?

• A)the difference between actual quantity used and standard quantity allowed for actual production
• B)the difference between actual costs of inputs and standard costs of inputs
• C)the difference between actual quantity used and standard quantity allowed for budgeted production
• D)the difference between actual price and standard quantity allowed in budgeted production

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Definitions:

Depreciation Expense

The allocated portion of the total cost of a company's physical assets that is expensed out on the income statement over a set period, reflecting the asset's consumption and wear and tear.

Fixed Costs

Costs that do not change with the level of production or sales, including expenses like rent, salaries, and insurance.

Variable Cost

Expenses that change in proportion with production output or sales, such as materials and labor.

Fixed Costs

Costs that remain constant regardless of the amount of goods produced or sold, like lease payments, wages, and coverage fees.