Which of the following statements is true regarding variance analysis in the modern manufacturing environment?
A) It requires all variances, regardless of size, to be investigated by managers.
B) The use of ideal standards over practical standards will always be the best motivator to employees.
C) An "unfavorable" variance should always be interpreted as "bad".
D) It is often not available in a timely enough manner to be useful to employees.

Question

Quizplus · Accepted Answer

Variance analysis requires timely information to be useful to employees in the modern manufacturing environment. If the analysis is not available in a timely manner, it cannot be used to identify and correct issues. A is incorrect because not all variances may require investigation. B is incorrect because ideal standards may not be achievable or may not motivate employees, and practical standards may be a better benchmark. C is incorrect because an unfavorable variance may be caused by factors outside the control of the manager, and may not necessarily be "bad".

Which of the Following Statements Is True Regarding Variance Analysis