The Difference Between Actual and Standard Cost Caused by the Difference

question 32

Multiple Choice

The difference between actual and standard cost caused by the difference between the actual price and the standard price is called the:

• A) Standard variance.
• B) Quantity variance.
• C) Volume variance.
• D) Controllable variance.
• E) Price variance.

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Definitions:

Accounts Receivable

Represents money owed to a business by its customers for goods or services delivered on credit.

Merchandise Purchases

The total cost incurred by a retail company to buy goods for resale during a particular accounting period.

Federal Income Taxes

Taxes levied by the federal government on the annual earnings of individuals, corporations, trusts, and other legal entities.

Credit Sales

Transactions where goods or services are provided to a customer with the agreement that payment will be made at a later date.