In a standard cost variance report,
A)the largest unfavourable variance is the one that will impact on the company the most.
B)the largest positive variance can be scanned and cleared the quickest.
C)the trend or pattern of variances on a period-to-period basis should be monitored.
D)management must set predetermined variance limits that will dictate what variances must be investigated.

Question

Quizplus · Accepted Answer

Monitoring the trend or pattern of variances on a period-to-period basis is important because it can help identify underlying issues in the production process or cost structure. It allows for proactive measures to be taken before the variances become too large, and helps prevent future inefficiencies. The other options are not necessarily true - the largest unfavourable variance may not always have the biggest impact, the largest positive variance may still require investigation, and predetermined variance limits may not always be appropriate for every situation.

In a Standard Cost Variance Report