Cost Variances Should Be Investigated When

question 136

Multiple Choice

Cost variances should be investigated when

• A)the results are favourable but within acceptable limits.
• B)costs incurred must be reduced.
• C)expected costs of investigation exceed expected benefits.
• D)the results are unfavourable but within acceptable limits.
• E)the amounts are immaterial.

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Definitions:

Internal Rate

Refers to the rate of growth a project is expected to generate.

Return Method

A sales return approach where the selling price of returned goods is deducted from gross sales to calculate net sales.

Capital Investment Analysis

The process by which management plans, evaluates, and controls long-term capital investments involving property, plant, and equipment.

Fixed Assets

Fixed Assets are long-term tangible assets purchased for use in business operations, intended to be used for more than one accounting period.