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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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