Which of the Following Statements Is NOT Correct

question 217

Multiple Choice

Which of the following statements is NOT correct?

• A) If the denominator level of activity and the standard hours allowed for the output of the period are the same, then there is no volume variance.
• B) If the denominator level of activity is greater than the standard hours allowed for the output of the period, then the volume variance is unfavourable.
• C) If the denominator level of activity is greater than the standard hours allowed for the output of the period, then the volume variance is favourable.
• D) The volume variance is the most appropriate measure of the utilization of plant facilities.

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Definitions:

Merchandising Companies

Businesses that purchase goods in finished form for the purpose of reselling them to customers without further processing.

Resale

Resale refers to the process of selling a previously purchased product, generally used or surplus items, to another buyer.

Financial Accounting

The branch of accounting that is concerned with recording transactions using generally accepted accounting principles (GAAP) for a business or other economic unit and with a periodic preparation of various statements from such records.

Business

An organization in which basic resources (inputs), such as materials and labor, are assembled and processed to provide goods or services (outputs) to customers.