Which of the following are factors that managers may use in deciding whether to investigate a variance?
A)Materiality and the effect of netting large and small variances
B)The effect of netting large and small variances and whether favorable or unfavorable
C)Whether the variance will increase or decrease operating income and materiality
D)Materiality and whether the variance will increase or decrease total costs

Question

Quizplus · Accepted Answer

Managers may consider materiality, meaning the size and significance of the variance, as well as the effect of netting large and small variances, in deciding whether to investigate a variance. The other choices may also be relevant but are not as comprehensive or specific as A.

Which of the Following Are Factors That Managers May Use