Which of the Following Statements Regarding Variances Is True

Multiple Choice

Which of the following statements regarding variances is true?

A) Variances need to be calculated when budgeted costs are used to allocate indirect costs.
B) Variances arise when an entity overestimates the expenditure level of indirect costs assigned to the cost pool or the expected usage of the cost driver.
C) Variances arise when an entity underestimates the expenditure level of indirect costs assigned to the cost pool or the expected usage of the cost driver.
D) All of the statements are true.