Multiple Choice Questions Which of the following statements concerning the use of planning and operational variances are true? (1) If the variances calculated using the original standard is adverse, then the operational variance will always be adverse (2) Operational variances are generally a better reflection of the underlying performance of managers than traditional variances (3) Planning variances reflect factors outside of the control of operational managers an all of the above B 2 and 3 only C 1 only D None of the above (4 marks) The following statement have been made in relation to activity based costing 1) A cost driver is a factor which cases a change in the cost of an activity 2) Traditional absorption costing tends to under-estimate overhead costs for high volume products A 1 only B 2 only C Neither 1 nor 2 D Both 1 and 2