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.

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