What Does a Cost Variance Measure

question 81

Multiple Choice

What does a cost variance 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

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Definitions:

IFRS Categories

Classifications under the International Financial Reporting Standards that dictate the presentation and disclosure of financial information in the financial statements.

Cash Flows

The sum of funds being moved in and out of a company, particularly influencing its ability to meet short-term obligations.

GAAP

Generally Accepted Accounting Principles, the standard framework of guidelines for financial accounting used in any given jurisdiction.

IFRS

International Financial Reporting Standards, a set of accounting rules and standards that define how transactions and other accounting events should be reported in financial statements. They are designed to be globally consistent to enhance international comparability and quality of financial statements.