If the Total Materials Variance for a Given Operation Is

question 13

Multiple Choice

If the total materials variance for a given operation is favorable, why must this variance be further evaluated as to price and usage?

• A) There is no need to further evaluate the total materials variance if it is favorable.
• B) Generally accepted accounting principles require that all variances be analyzed in three stages.
• C) All variances must appear in the annual report to equity owners for proper disclosure.
• D) A further evaluation lets management evaluate the activities of the purchasing and production functions.

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Definitions:

Thematic Apperception Test

A projective psychological test wherein individuals express their thoughts and feelings through stories they create about ambiguous images.

TAT

Thematic Apperception Test, a psychological assessment tool in which subjects create stories based on ambiguous images, used to reveal their underlying emotions, attitudes, and patterns of thought.

Thematic Apperception Test

A projective psychological test where subjects are shown pictures and asked to create a story, revealing their underlying motives, feelings, and attitudes.

Ambiguous Picture

An image or representation that can be interpreted in more than one way due to its unclear or indeterminate nature.