Variances should be investigated if they ________.
A) are favorable
B) are unfavorable
C) are smaller than the variances in the prior period
D) exceed certain dollar amounts or percentage deviations from the budget

Question

Quizplus · Accepted Answer

Variances should be investigated if they exceed certain dollar amounts or percentage deviations from the budget. This is because significant variances may indicate potential issues or inefficiencies that need to be addressed. Favorable or unfavorable variances alone are not sufficient indicators for investigation, as they may be within acceptable ranges or have justifiable reasons. Similarly, smaller variances in the current period compared to the prior period may not necessarily be indicative of improved performance, as there could be various factors affecting the comparison.

Variances Should Be Investigated If They ________