The Variance Is Denominated in Squared Units, Whereas the Standard

question 78

True/False

The variance is denominated in squared units, whereas the standard deviation is denominated in the same units as the expected value.

---

Definitions:

Operating Income

The profit realized from a business's operations, calculated by subtracting operating expenses from gross profit.

Absorption Costing

An approach to pricing that incorporates all production-related costs such as direct materials, direct labor, along with variable and fixed overhead expenses, into the product’s cost.

Variable Costing

An accounting method that includes only variable production costs (costs that vary with output) in product costs, while fixed costs are charged to the period they occur.

Operating Income

The financial gain obtained through the main functions of a firm, without considering the reductions for interest and taxes.