How do managers decide which variances are important enough to investigate?
I. By considering whether they are favourable or unfavourable
II. By calculating and investigating all possible variances
III. By considering whether it is large enough to justify investigation
A) I only
B) II only
C) III only
D) I and III only

Question

Quizplus · Accepted Answer

Managers typically investigate variances that are large enough to justify the cost and effort of investigation, regardless of whether they are favorable or unfavorable.

How Do Managers Decide Which Variances Are Important Enough to Investigate