Variances should be investigated if they ________.
A)are favorable
B)are unfavorable
C)are smaller than the prior period
D)exceed certain dollar or percentage deviations from the budget

Question

Quizplus · Accepted Answer

Variances are typically investigated if they exceed certain dollar or percentage deviations from the budget. Therefore, only option D is a correct reason for investigating variances. A and B do not provide enough information about the magnitude or direction of the variances, and C assumes that smaller variances automatically require investigation, which is not always the case.

Variances Should Be Investigated If They ________