The Beta Sorority held a party.The sorority prepared the following budget for 25 expected attendees: $$\begin{array} { l r }
\text { Roomrental } & \$ 150 \
\text { Food } & 310 \
\text { Entertainment } & 150 \
\text { Decorations } & 75 \\
\text { Totals }& \$ 685
\end{array}$$ After all bills for the party were paid, the total came to $760.Details are: $240 for room rental; $320 for food; $145 for entertainment; and $75 for decorations.Twenty-five persons attended the party. Which of the following costs deserves further examination assuming the sorority uses the management-by-exception rule?

Question

The Beta Sorority held a party.The sorority prepared the following budget for 25 expected attendees: $$\begin{array} { l r } 
\text { Roomrental } & \$ 150 \
\text { Food } & 310 \
\text { Entertainment } & 150 \
\text { Decorations } & 75 \\
\text { Totals }& \$ 685
\end{array}$$ After all bills for the party were paid, the total came to $760.Details are: $240 for room rental; $320 for food; $145 for entertainment; and $75 for decorations.Twenty-five persons attended the party. Which of the following costs deserves further examination assuming the sorority uses the management-by-exception rule?

Quizplus · Accepted Answer

Room rental exceeded the budgeted amount by $90 ($240 actual vs. $150 budgeted), which is a significant variance and thus deserves further examination under the management-by-exception rule.

The Beta Sorority Held a Party After All Bills for the Party Were Paid, the Total