Which of the following statements is not true about variance analysis?
A) Variance analysis is used to help isolate costs that are not what they should be
B) Almost any type of resource can be analyzed using variance analysis
C) Variance analysis drives many operations actions because it facilitates the control of various contributors of cost
D) Unfavorable variances often provide the catalyst for productivity improvements
E) The actual quantity at the standard price minus the standard quantity at the standard price provides the total variance

Question

Quizplus · Accepted Answer

The statement E is not true about variance analysis because it incorrectly describes how to calculate the total variance. The total variance is typically calculated by comparing the actual cost to the standard cost, not by subtracting the standard quantity at the standard price from the actual quantity at the standard price. This calculation might refer to a specific type of variance (like material quantity variance) but does not accurately represent the calculation of total variance.

Which of the Following Statements Is Not True About Variance