Which of the Following Statements Is True

question 114

Multiple Choice

Which of the following statements is true?

• A) An unfavorable materials price variance could have resulted from actions taken by the purchasing agent.
• B) An unfavorable materials usage variance could have resulted from actions taken by the production supervisor.
• C) An unfavorable labor usage variance could have resulted from actions taken by the personnel department.
• D) All of these answers are correct.

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Definitions:

Net Income (Loss)

The total profit or loss a company generates in a specific period after all expenses, taxes, and costs have been deducted from total revenue.

Fixed Expenses

Costs that do not change with the level of production or sales activities within a certain range or period.

Variable Expenses

Costs that change in proportion to the level of activity within a business.

Contribution Margin

The amount by which the sales revenue of a product exceeds its variable costs, indicating how much contributes towards covering fixed costs and generating profit.