Which of the following is true of variance?
A) Managers should interpret a favorable variance as "good news".
B) Managers should not simply interpret a favorable variance as good but should understand why the variance occurred.
C) A small variance or zero variance definitively reveals efficient performance.
D) Managers' performance must be evaluated solely on single variance.

Question

Quizplus · Accepted Answer

Managers should not simply interpret a favorable variance as good, but should investigate the reasons behind it. Similarly, an unfavorable variance should not always be viewed as bad without understanding the underlying causes. It is important for managers to analyze variances to gain insight into their operations and make informed decisions for future performance improvement. Options A, C, and D are incorrect as they do not accurately describe the nature and significance of variance analysis.

Which of the Following Is True of Variance