Asked by Meliza Acosta on Jun 18, 2024
Verified
In reporting variances
A) promptness is relatively unimportant.
B) management normally investigates all variances.
C) the reports should facilitate management by exception.
D) the reports are not departmentalized.
Management By Exception
A management strategy where managers intervene only when performance deviates significantly from standards, allowing them to focus on significant issues.
Variances Reports
Financial reports that compare actual financial results to the budgeted or standard costs, highlighting deviations.
Promptness
The quality of acting quickly or within an expected timeframe.
- Fathom the factors causing differences and their interpretations.
Verified Answer
NP
Nimali PriyangikaJun 22, 2024
Final Answer :
C
Explanation :
The reports should facilitate management by exception, meaning that only significant variances need to be investigated and reported, while small or insignificant variances can be ignored. Promptness is important to ensure timely decision making, management may not investigate all variances if they are not significant enough to affect the overall performance, and variances are often departmentalized to help identify areas of responsibility for the variance.
Learning Objectives
- Fathom the factors causing differences and their interpretations.