Which of the Following Is NOT Characteristic of Variance Investigation

question 173

Multiple Choice

Which of the following is NOT characteristic of variance investigation?

• A)The investigation should be undertaken only if the anticipated benefits are greater than the expected costs.
• B)It is difficult to assess the costs and benefits of variance analysis on a case-by-case basis.
• C)Variances are not investigated unless they are large enough to be of concern.
• D)Every variance is investigated.

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Definitions:

Last-In, First-Out

An inventory valuation method where the most recently produced items are the first to be expensed, often used in industries where inventory items are indistinguishable.

Lower-Of-Cost-Or-Market

The lower-of-cost-or-market rule is an accounting principle requiring companies to record the cost of inventory at the lower value between its original cost and current market price.

Market Decline

A reduction in the overall value of the market, often indicated by decreases in stock prices and market indexes.

Lower Of Cost

is an accounting principle requiring inventory to be recorded at the lower of either its historical cost or current market value, ensuring assets are not overstated.