Which statement is true? A. Gross profit (GP) variance analysis, is an essential part of financial statements analysis that is used to evaluate the performance of a firm's departments responsible for the firm's line activities (functions). B. Increases and decreases in sales and cost of sales have direct relationship with increases and decreases in GP. C. If there is a negative sales price variance and there is no cost variance, the gross profit variance will be equal to th sales price variance. D. A zero cost variance indicates that there is no difference between the standard cost prices and actual cost prices. E. none of the above

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Which statement is true?
A. Gross profit (GP) variance analysis, is an essential part of
financial statements analysis that is used to evaluate
the performance of a firm's departments responsible
for the firm's line activities (functions).
B. Increases and decreases in sales and cost of sales have
direct relationship with increases and decreases in GP.
C. If there is a negative sales price variance and there is no
cost variance, the gross profit variance will be equal to the
sales price variance.
D. A zero cost variance indicates that there is no difference
between the standard cost prices and actual cost prices.
E. none of the above
Transcribed Image Text:Which statement is true? A. Gross profit (GP) variance analysis, is an essential part of financial statements analysis that is used to evaluate the performance of a firm's departments responsible for the firm's line activities (functions). B. Increases and decreases in sales and cost of sales have direct relationship with increases and decreases in GP. C. If there is a negative sales price variance and there is no cost variance, the gross profit variance will be equal to the sales price variance. D. A zero cost variance indicates that there is no difference between the standard cost prices and actual cost prices. E. none of the above
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