Which of the following statements is true regarding "management by exception"?
A) It is rarely used in variance analysis.
B) It forces managers to investigate all variances, regardless of size.
C) It requires managers to investigate variances that are material in amount.
D) It requires managers to calculate standard costs but not actual costs.

Question

Quizplus · Accepted Answer

Management by exception only requires managers to investigate variances that are material in amount, saving time and resources. It is commonly used in variance analysis to focus on significant variances and ignore small and insignificant ones. The other options are incorrect as they do not accurately describe management by exception.

Which of the Following Statements Is True Regarding "Management by Exception