To identify a variance without indicating whether it is favorable (F) or unfavorable (U) does not indicate
A)the impact of the variance on operating income.
B)the amount of the variance.
C)whether the amount relates to price or quantity.
D)whether the amount relates to rate or efficiency.

Question

Quizplus · Accepted Answer

Identifying a variance without specifying if it is favorable or unfavorable does not reveal its impact on operating income. Favorable variances increase operating income, while unfavorable ones decrease it. Without this distinction, the effect on financial performance remains unclear.

To Identify a Variance Without Indicating Whether It Is Favorable