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.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter9: Standard Costing: A Functional-based Control Approach
Section: Chapter Questions
Problem 12DQ: What is the cause of an unfavorable volume variance? Does the volume variance convey any meaningful...
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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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