Which variances are most important to investigate?
A)Variable costs variances, because they are controllable
B)Those that are material in amount
C)Those that are immaterial in amount
D)Those that are unfavorable

Question

Quizplus · Accepted Answer

Material variances are those that can have a significant impact on the overall financial performance of a business. Therefore, it is important to investigate these variances to identify any potential issues and take corrective action if necessary. Variances that are immaterial in amount may not have a significant impact and can be ignored. Variable costs variances may or may not be controllable depending on the nature of the costs, so they are not the most important factor to consider. Unfavorable variances can provide valuable insight into areas of the business that need improvement, but they should not be the sole focus of variance analysis.

Which Variances Are Most Important to Investigate