What Do Cost Variances Measure

question 151

Multiple Choice

What do cost variances measure?

• A) the difference between the cost the company pays and the cost its competitors pay
• B) the change in costs over time
• C) how well the business keeps unit costs of material and labor inputs within standards
• D) the volume discounts companies receive when ordering direct materials in large quantities

---

Definitions:

Repudiation

An indication by one party to the other that there will be a failure to honour the contract (the expression of which can be expressed or implied).

Condition Breached

When a specific condition or term in a contract is violated or not fulfilled as agreed.

Damages

Financial compensation awarded by a court to a party who has suffered loss or injury due to the actions or negligence of another party.

Obligations

Duties or responsibilities imposed by law, contract, or moral imperatives, often requiring action or forbearance.