As a general rule,under what circumstances should an investigation of a variance be undertaken?
A)only if the anticipated benefits are greater than zero
B)only if the anticipated benefits are greater than the expected costs
C)only if the variance is negative
D)only if the variance is positive

Question

Quizplus · Accepted Answer

An investigation of a variance should only be undertaken if the anticipated benefits are greater than the expected costs. This means that the potential benefits of investigating the variance must outweigh the costs associated with the investigation, including any expenditures of time, resources or money. Whether the variance is positive or negative is not relevant in determining whether an investigation is warranted. The key factor is whether the benefits of the investigation justify the costs. Therefore, choice B is the best option.

As a General Rule,under What Circumstances Should an Investigation of a Variance