What is the most viable rule of thumb for choosing variances that should be investigated?
A) Greater than $10 000 or greater than 10 per cent of standard cost
B) Greater than 50 per cent of standard
C) Never investigate favourable variances
D) Always investigate unfavourable variances

Question

Quizplus · Accepted Answer

A variance that is greater than $10,000 or greater than 10% of the standard cost is a significant amount that could have a material impact on the overall profitability of the company. Therefore, it is important to investigate variances that meet this criteria.

What Is the Most Viable Rule of Thumb for Choosing