Dunellon Company's actual sales results exceeded the planned results for February.This amount exceeded the amount of an unfavourable difference reported for January sales.Which one of the following statements about the sales budget report for the two months ending February 28 is true?
A)The sales report is not useful since it shows a favourable and unfavourable difference for the two months.
B)The differences for the two months will offset each other so the differences should not be a concern.
C)The difference for February can be ignored since it is favourable.
D)The differences for both months should be investigated if the amounts are material.

Question

Quizplus · Accepted Answer

The fact that there was an unfavourable difference in January and a favourable difference in February indicates that there may be underlying issues affecting sales. It is important to investigate both differences to determine the root cause of the changes in sales performance. Therefore, the differences for both months should be investigated if the amounts are material.

Dunellon Company's Actual Sales Results Exceeded the Planned Results for February.This