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 'unfavourable' variance should always be interpreted as 'bad'.
D) It is often not performed in a timely enough manner to be useful to employees.

Question

Quizplus · Accepted Answer

Variance analysis in the modern manufacturing environment is often performed with advanced software and technology, which allows for real-time tracking and analysis of variances. This means that timely analysis is possible, but it still has to be done by the managers in charge. Therefore, variance analysis is only useful if it is performed in a timely manner. All variances are not required to be investigated, and ideal standards may not always be the best motivator. An 'unfavourable' variance may not always be bad, as it may be due to factors beyond the control of the company.

Which of the Following Statements Is True Regarding Variance Analysis