Reference no: EM132548807

Question 1: With regard to the different types of variances we have discussed in this class, which of the following statements is FALSE?

A.) When determining Activity Variances, we compare the amounts on the Static Planning Budget with the actual Revenues and Costs for the period.

B.) An Activity Variance arises solely due to the difference between the actual level of activity and the level of activity included in the Planning Budget.

C.) The difference between the Revenue calculated on the Flexible Budget and the Actual Revenue for the period is referred to as a Revenue Variance.

D.) The difference between the Costs calculated on the Flexible Budget and the Actual Costs for the period are referred to as Spending Variances.

Question 2: The Labor Efficiency Variance is best defined as...

the difference between standard labor hours at the actual rate and actual labor hours at the actual rate.

the difference between standard labor hours at the standard rate and actual labor hours at the standard rate.

the difference between actual labor hours at the standard rate and standard labor hours at the actual rate.

the difference between actual labor hours at the actual rate and standard labor hours at the standard rate.

Question 3: If someone is making the decision to take a personal vehicle on a road trip or use mass transit (bus, train, or plane) to reach his or her destination instead, which of the following statements is FALSE?

A.) Vehicle owners should always consider the potential reduction in resale value of the vehicle a relevant cost because each additional mile of wear B.) Vehicle insurance fees should not be considered relevant to this decision. These costs would only be relevant if the owner was considering selling the vehicle and using mass-transit on a permanent basis.

C.) If someone lives in an apartment and pays a monthly fee to park a car in the lot, which is built into the rental contract, they should not consider that cost relevant to this decision.

D.) Intangible and/or incalculable costs and benefits should not be considered relevant to this decision because a dollar value cannot be placed on the alternatives, thus making a decision impossible.