A Company Is Reviewing the Variances for the Previous Month

question 6

Multiple Choice

A company is reviewing the variances for the previous month:

Which of the following statements is most likely to be INCORRECT?

• A) There is an adverse variance overall. This could be due to the standard being out of date
• B) The large favourable price variance on Material X indicates that buyers have found the best deal for the company
• C) The favourable labour rate and adverse efficiency variances could be the result of using new, inexperienced staff
• D) An adverse labour rate variance could be the result of a recent pay rise

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Definitions:

Auditory Projection Area

The part of the brain responsible for processing auditory information, primarily located in the temporal lobes.

Perseveration

The repetitive and continuous focus on a single idea, response, or task, even in the face of changing circumstances or new information.

Prefrontal Cortex

A region in the frontal lobes of the brain associated with decision making, social behavior, personality expression, and moderating complex cognitive behavior.

Impulses

Impulses are sudden desires or urges to act or react without premeditation, often driven by internal or external stimuli and can significantly influence behavior and decision-making.