Which of the following is not a reason standard costs are separated into two components?
A) The price and quantity variances need to be identified separately to correct the actual major differences.
B) Identifying variances determines which manager must find a solution to major discrepancies.
C) If a negative variance is overshadowed by a favorable variance, managers may overlook potential corrections.
D) Variances bring attention to discrepancies in the budget and require managers to revise budgets closer to actual results.

Question

Quizplus · Accepted Answer

Standard costs are separated into price and quantity components primarily to identify where variances occur, assign responsibility, and ensure that negative variances are addressed. The separation is not specifically about revising budgets closer to actual results, but about managing and controlling costs effectively.

Which of the Following Is Not a Reason Standard Costs