When using management by exception, a difference between actual costs and budgeted costs
A)should be investigated if the amount is large.
B)indicates that the planned cost was poorly estimated.
C)indicates that the manager is doing a poor job.
D)should be ignored if it increases profit.

Question

Quizplus · Accepted Answer

When using management by exception, any significant difference between actual costs and budgeted costs should be investigated, as it can indicate an issue that requires attention. It does not necessarily mean that the planned cost was poorly estimated or that the manager is doing a poor job. If the discrepancy is improving profitability, it can still be worthwhile to investigate to identify any areas for improvement in the budgeting and planning process.

When Using Management by Exception, a Difference Between Actual Costs