Relevant Information Has All of These Characteristics EXCEPT

question 153

Multiple Choice

Relevant information has all of these characteristics EXCEPT:

• A)past costs are irrelevant
• B)all future revenues and expenses are relevant
• C)different alternatives can be compared by examining differences in total revenue and expenses
• D)qualitative factors should be considered

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Definitions:

Variable Overhead Efficiency

The variance indicating the efficiency with which a variable overhead cost is incurred in relation to an activity level, such as machine or labor hours.

Rate Variance

The difference between the actual rate paid for an item or service and the expected (standard) rate, used in budgeting and cost control.

Budget Variance

A measurement of the difference between the budgeted or planned amount of expense or revenue, and the actual amount incurred/sold.

Predetermined Overhead Rate

An estimated charge used to distribute overhead costs to products or projects, based on an expected standard, allowing for cost allocation before actual expenses are known.