In gross profit analysis, if the cost variance is zero, such variance indicates that a. Manufacturing management was able to control production cost below budgeted costs b. Manufacturing management was unable to keep production costs at budgeted costs. c. Manufacturing management was able to control production cost at budgeted costs. d. Manufacturing management was not able to control production at budgeted costs but purchasing was able to keep at budgeted price.
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
In gross profit analysis, if the cost variance is zero, such variance indicates that
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