WHICH OF THE FOLLOWING IS NOT AN ADVANTAGE OF USING STANDARDCOSTS AND VARIANCES?A. USE AS A PERFORMANCE BENCHMARK FOR EVALUATION OF ACTUALCOSTS.B. USE AS A BASIS FOR COMPONENTS OF THE MASTER BUDGET.C. SIMPLIFICATION OF BOOKKEEPING.D. CHANGE IN BEHAVIOR OF MANAGERS TO OBTAIN DESIRED VARIANCES.

Step 1: Definition of Standard Costs and VariancesStandard costs are predetermined estimates of the…

Answered: WHICH OF THE FOLLOWING IS NOT AN…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 14DQ

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Similar questions

Does the volume variance convey any meaningful information to managers?
What is the cause of an unfavorable volume variance? Does the volume variance convey any meaningful information to managers?
What two factors must be considered when breaking down a variance into its components?
Which of the following is not a part of budgeting? A. planning B. finding bottlenecks C. providing performance evaluations D. preventing net operating losses
During the control function, the measurements taken of the performance must be accurate enough to see _______________________________. only positive results deviations and variances the primary focus only the negative results
When might an unfavorable variance be a good outcome?
When would a static budget be effective in evaluating a managers performance?
Variance analysis would be appropriate to measure performance ina. profit centers.b. investment centers.c. cost centers.d. all of the above.
Which of the following statements is false? Standard costs (e.g., how much should be paid for each unit of input) are benchmarks for measuring performance. Managers should investigate only unfavorable variances. Variance analysis enhances responsibility accounting. A variance is the difference between the budgeted amount and actual amount.
Explain what is meant by the term management by exception. What is the relationship between the process of standard cost variance analysis and management by exception? Give some examples, positive and negative of management by exception.
What does the concept of ‘management by exception’ mean and what factors are considered when assessing the significance of a variance?
When management uses variance reports to evaluate cost control, they look into which of the following? O both variable and unfavorable variances that exceed a predetermined quantitative measure such as a percentage or dollar amount. no variances O unfavorable variances only O favorable variances only

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WHICH OF THE FOLLOWING IS NOT AN ADVANTAGE OF USING STANDARD COSTS AND VARIANCES? A. USE AS A PERFORMANCE BENCHMARK FOR EVALUATION OF ACTUAL COSTS. B. USE AS A BASIS FOR COMPONENTS OF THE MASTER BUDGET. C. SIMPLIFICATION OF BOOKKEEPING. D. CHANGE IN BEHAVIOR OF MANAGERS TO OBTAIN DESIRED VARIANCES.