The total variance does not provide useful information about the source of cost differences.

Name: The total variance does not provide useful information about the source of cost differences.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The total variance only tells us the overall variance in costs but does not specify the reasons why the costs differ. To determine the source of cost differences, we need to analyze the individual components of the variance such as price variance, quantity variance, or efficiency variance.

The Total Variance Does Not Provide Useful Information About the Source