Variances to the budget should be interpreted by using the principle of
A)management by exception.
B)management by objectives.
C)management by exemption.
D)exceptions to variances.

Question

Quizplus · Accepted Answer

Variances to the budget should be interpreted by using the principle of management by exception. This means that only significant variances that deviate from the budget by a certain threshold should be reported and investigated, while small variances can be ignored. This approach allows management to focus on areas that require attention and take corrective action to maintain the overall financial performance of the company.

Variances to the Budget Should Be Interpreted by Using the Principle