Which of the Following Statements Is TRUE About Price Variances

question 50

Multiple Choice

Which of the following statements is TRUE about price variances and quantity (or efficiency) variances?

• A) They pertain to the difference between the static budget and actual results.
• B) They pertain to the difference between the flexible budget and actual results.
• C) They pertain to the difference between the flexible budget and the static budget.
• D) They pertain to the difference between the static budget and the previous year's actuals.

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Definitions:

Inventory

The total amount of goods stored by a company that is ready or will be ready for sale.

Service Inventory

Intangible goods in a service operation that cannot be stored or inventoried in the traditional sense, such as available hotel rooms or hours of consulting.

Service Stockout

Occurs when a service provider cannot meet customer demand due to insufficient resources or capacity, leading to customer dissatisfaction.