As a general rule, an investigation of a variance should be undertaken only if the
A) anticipated benefits are greater than zero.
B) anticipated benefits are greater than the expected costs.
C) variance is negative.
D) variance is positive.

Question

Quizplus · Accepted Answer

The investigation of a variance should be undertaken only if the anticipated benefits are greater than the expected costs. This means that the potential gains from investigating the variance should outweigh the costs associated with the investigation. A positive or negative variance itself does not determine whether an investigation is warranted; it is the analysis of the costs and benefits that is important when deciding whether to investigate a variance.

As a General Rule, an Investigation of a Variance Should