Indicate Whether Each of the Following Statements Is True or False

question 92

Short Answer

Indicate whether each of the following statements is true or false.
In deciding whether to investigate a variance,managers should consider the materiality,but not the type or direction,of the variance.______
A material variance is one that will influence stockholders' investment decisions.______
The primary advantage of a standard cost system is controlling costs efficiently.______
Ideal standards will likely lead to variances that need not be investigated because they are not the result of abnormalities.______
Even a well-established and -maintained standard cost system is likely to damage employee morale.______

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Definitions:

Taxable Income

The portion of income that is subject to taxation, after all deductions, exemptions, and adjustments.

Tax-exempt Bonds

Bonds issued by governmental entities that do not require the owners to pay taxes on the interest earned from these bonds.

Book Income

The income or loss reported by a business for financial reporting purposes, not necessarily reflective of the taxable income according to tax regulations.

Subchapter S Stock

Refers to shares of corporations that elect to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes.