Which of the Following Statements Regarding Variances Is True

question 59

Multiple Choice

Which of the following statements regarding variances is true?

• A) Variances need to be calculated when budgeted costs are used to allocate indirect costs.
• B) Variances arise when an entity overestimates the expenditure level of indirect costs assigned to the cost pool or the expected usage of the cost driver.
• C) Variances arise when an entity underestimates the expenditure level of indirect costs assigned to the cost pool or the expected usage of the cost driver.
• D) All of the statements are true.

---

Definitions:

Traveler's Checks

Preprinted, fixed-amount checks designed to allow the person signing them to pay for goods or services in a foreign currency securely.

FDIC

The Federal Deposit Insurance Corporation is a United States government agency that protects depositors in the event of a bank failure, insuring deposits up to a specified limit.

Financial Well Being

A state where an individual has a stable financial condition, able to meet current and future expenses, and feels secure in their financial future.

Government Regulation

Rules established by government aimed at controlling or directing economic or social activities.