Cost variances are further investigated for price and efficiency variances because: A) It helps to identify which department managers are responsible for major discrepancies and should find solutions. B) All of the answer choices are correct. C) An unfavorable price variance could be overshadowed by favorable efficiency variance and not investigated for potential corrections. D) It is necessary to find out whether the cost variances are due to price variance or efficiency variance for both and take corrective action accordingly.
Cost variances are further investigated for price and efficiency variances because: A) It helps to identify which department managers are responsible for major discrepancies and should find solutions. B) All of the answer choices are correct. C) An unfavorable price variance could be overshadowed by favorable efficiency variance and not investigated for potential corrections. D) It is necessary to find out whether the cost variances are due to price variance or efficiency variance for both and take corrective action accordingly.
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter9: Evaluating Variances From Standard Costs
Section: Chapter Questions
Problem 4DQ: The materials cost variance report for Nickols Inc. indicates a large favorable materials price...
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Cost variances are further investigated for price and efficiency variances because:
A) It helps to identify which department managers are responsible for major discrepancies and should find solutions.
B) All of the answer choices are correct.
C) An unfavorable price variance could be overshadowed by favorable efficiency variance and not investigated for potential corrections.
D) It is necessary to find out whether the cost variances are due to price variance or efficiency variance for both and take corrective action accordingly.
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