Variances should be investigated if they _____.
A)are unfavorable
B)are different from the prior period results
C)exceed certain stated dollar or percentage deviations from the budget
D)are favorable

Question

Quizplus · Accepted Answer

Variances should be investigated if they exceed certain stated dollar or percentage deviations from the budget. While unfavorable variances are generally considered negative, they may not always warrant investigation. Similarly, favorable variances may not necessarily be investigated since they indicate that actual results were better than expected. Differences from prior period results may be relevant information, but they alone do not necessarily indicate a need for investigation.

Variances Should Be Investigated If They _____