If the organization is making good progress toward achieving an ideal standard, its management may not need to:
A) Modify its standards.
B) Curtail spending on variable costs.
C) Curtail spending on fixed costs.
D) Review and revise the management accounting system.
E) Take any corrective action when variances are reported.

Question

If the organization is making good progress toward achieving an ideal standard, its management may not need to: 
A) Modify its standards.
B) Curtail spending on variable costs.
C) Curtail spending on fixed costs.
D) Review and revise the management accounting system.
E) Take any corrective action when variances are reported.

Quizplus · Accepted Answer

If the organization is making good progress toward achieving an ideal standard, it means that it is likely meeting its goals and objectives. In such a scenario, there is no need to take corrective action when variances are reported. Therefore, option E is the best choice. Choices A, B, and C are not applicable as there is no need to modify standards or curtail spending when things are going well. Option D may be relevant for ongoing continuous improvement, but it is not necessary to do so in this specific case.

If the Organization Is Making Good Progress Toward Achieving an Ideal