When a Company Is Using Standard Costs, an Unfavorable Variance

question 90

True/False

When a company is using standard costs, an unfavorable variance is NOT necessarily an indication that a manager is doing a poor job.

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Definitions:

Supplies

Items that are used in the daily operations of a business or organization, often consumed in the process.

Accounts Receivable

Receivables from customers for products or services rendered by a company, awaiting payment.

Accounts Payable

An accounting entry representing a company's obligation to pay off a short-term debt to its creditors or suppliers.

Correcting Entry

An accounting entry made to correct any erroneous or previously misunderstood transactions recorded in the financial statements.