If a Company Follows a Practice of Isolating Variances at the Earliest

question 80

Multiple Choice

If a company follows a practice of isolating variances at the earliest point in time,what would be the appropriate time to isolate and recognize a direct material price variance?

• A)When material is purchased
• B)When material is used in production
• C)When purchase order is originated
• D)When material is issued

---

Definitions:

Crowding-out Effects

The phenomenon where increased government spending leads to a reduction in private sector spending.

Supply-siders

Supply-siders are economists or policymakers who believe that reducing tax rates and regulatory barriers to production and investment can stimulate supply, leading to economic growth.

Aggregate Supply

The total supply of goods and services that firms in an economy are willing and able to produce at different price levels during a specific time period.

Automatic Stabilizers

Changes in fiscal policy that stimulate aggregate demand when the economy goes into a recession without policymakers having to take any deliberate action