Question

All of the following are true regarding variance investigation except:

a. variances are not investigated unless they are large enough to be of a concern. b. the investigation should be undertaken only if the anticipated benefits are greater than the expected costs. c. managers must consider whether a variance will recur. d. every variance is investigated. e. it is difficult to assess the costs and benefits of variance analysis on a case-by-case basis.

Which of the following is true regarding currently attainable standards?

a. They provide allowance for normal breakdowns, interruptions, etc. b. They do not provide any allowance for any lack of skill. c. They demand the maximum efficiency of all the producing factors. d. They are can be achieved only if everything operates perfectly. e. All of these choices are correct.

Several transfer pricing policies are used in practice. These transfer pricing policies include

a. transfer at cost. b. transfer at market price. c. transfer at negotiated price. d. All of these choices are correct.

In setting price standards for materials and labor,

a. personnel must consider payroll taxes, fringe benefits, and qualifications. b. it is the joint responsibility of operations, purchasing, personnel, and accounting. c. the purchasing department must consider discounts, freight, and quality. d. All of these choices are correct. e. None of these choices are correct.

Answer 1

All of the following are true regarding variance investigation except:

Ans is D every variance is investigated.

Reason:- It is not radical to investigate all variances. Only those variances which breach the threshold limit should normally be analyzed unless there is urgent need.

Which of the following is true regarding currently attainable standards?

Ans is E All of these choices are correct.

Reason:- Currently attainable standards are those standards which are attainable at present. But if there is any lack of skill it will not be considered in that because I cannot be measured by management accounting.

Several transfer pricing policies are used in practice. These transfer pricing policies include

Ans is D All of these choices are correct.

Reason:- These all are methods of transfer pricing.

In setting price standards for materials and labor,

Ans is D All of these choices are correct.

Reason:- All are really critical in determining the price standards.

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