The Flintstone Company held a Groundhog Day party.The company expected attendance of 100 persons and prepared the following budget: $\begin{array}{lr}
\text { Hotel room rental } & \$ 600 \
\text { Food } & 500 \
\text { Entertainment } & 800 \
\text { Decorations } & \underline{300} \
& \
\text { Totals } & \$ 2,200
\end{array}$ After all bills for the party were paid, the total came to $2,315.Details are: $575 for hotel room rental; $640 for food; $750 for entertainment; and $350 for decorations.One hundred persons attended the party. Which of the following costs deserves further examination assuming the Flintstone Company uses the management-by-exception rule?

Question

Quizplus · Accepted Answer

The cost of food exceeded the budgeted amount by $140 ($640 actual vs. $500 budgeted), which is a significant variance and thus deserves further examination under the management-by-exception rule.

The Flintstone Company Held a Groundhog Day Party After All Bills for the Party Were Paid, the Total