Which of the following statements about management by exception is incorrect?
A) Managers concentrate on results that are outside the accepted parameters.
B) There is no need to investigate variances that are less than 10%.
C) Exceptions can be expressed as a percentage of a budgeted amount or a dollar amount.
D) Many companies use a combination of percentages and dollar amounts.

Question

Quizplus · Accepted Answer

There is no standard or set percentage for investigating variances when using management by exception. Whether a variance is investigated or not depends on the individual company's policies and procedures. Therefore, it is incorrect to suggest that there is a universal threshold of 10% that triggers investigation.

Which of the Following Statements About Management by Exception Is