Which of the following explains why managers compare the budgeted costs to actual costs?
A)Managers only focus on the budgeted costs.
B)Managers only learn how to make better decisions in the future.
C)Managers know how well they did to control costs only.
D)Managers evaluate how well they did to control costs and learn how to do better in the future.
E)Managers never compare these costs.

Question

Quizplus · Accepted Answer

Managers evaluate how well they did to control costs and learn how to do better in the future. By comparing budgeted costs to actual costs, managers can identify areas where they exceeded the budget and take corrective action in the future. They can also identify areas where they stayed within or came in under budget and use those strategies to improve future budgeting and decision-making.

Which of the Following Explains Why Managers Compare the Budgeted