Suppose the Standard for a Given Cost During a Period

question 113

Multiple Choice

Suppose the standard for a given cost during a period was $80,000.The actual cost for the period was $72,000.Under what circumstances would you consider the variance from budget to be a positive performance indication?

• A)The cost is fixed,and actual production was 90 percent of the standard level of budgeted production.
• B)The cost is variable,and the standard cost noted above is the cost at a production level lower than the actual production level.
• C)The cost is variable,and actual production was 90 percent of the standard level of production.
• D)The cost is variable,and actual production was 75 percent of the standard level of production.

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Definitions:

Direct Experience

Knowledge or skill acquired through immediate observation or participation, without the intermediation of others or the use of technology.

Anticipate

The act of expecting or predicting something to happen in the future and possibly preparing for it.

Associative Learning

The process of learning in which a connection or association is formed between two stimuli or between a behavior and a stimulus.

Excessive Amount

An amount that is much more than what is reasonable or necessary.