Answer false explanation even though service sector

This preview shows page 70 - 71 out of 71 pages.

We have textbook solutions for you!
The document you are viewing contains questions related to this textbook.
College Accounting, Chapters 1-27
The document you are viewing contains questions related to this textbook.
Chapter 24 / Exercise 1
College Accounting, Chapters 1-27
Heintz/Parry
Expert Verified
Answer: FALSEExplanation: Even though service-sector companies have only few costs can be traced to their outputs in a cost effective way, service-sector companies can use variance analysis to good effect as most of their costs are fixed overhead costs.Diff: 2Objective: 8AACSB: Analytical thinking
We have textbook solutions for you!
The document you are viewing contains questions related to this textbook.
College Accounting, Chapters 1-27
The document you are viewing contains questions related to this textbook.
Chapter 24 / Exercise 1
College Accounting, Chapters 1-27
Heintz/Parry
Expert Verified
4) Explain how service-sector companies can benefit from variance analysis.Answer: Service-sector companies such as airlines, hospitals, hotels, and railroads can benefit from variance analyses. The output measures these companies commonly use are passenger-miles flown, patient days provided, room-days occupied, etc. Few costs can be traced to these outputs in a cost-effective way. Most of the costs are fixed overhead costs, such as the costs of equipment, buildings, and staff. Using capacity effectively is the key to profitability, and fixed overhead variances can help managers in this task.Diff: 2Objective: 8AACSB: Analytical thinking

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture