If a variance analysis shows that operations are better than expected, managers should:
A) Do nothing
B) Revise standard costs to make them harder to achieve
C) Distribute extra dividends to shareholders
D) Monitor quality to ensure it was maintained

Question

Quizplus · Accepted Answer

If operations are better than expected, it's important for managers to monitor the quality to ensure it was maintained. This will help identify the reasons behind the positive variance and also eliminate any negative impacts it may have in the future. Simply doing nothing, revising standard costs or distributing extra dividends to shareholders do not directly address the issue of maintaining the level of performance achieved.

If a Variance Analysis Shows That Operations Are Better Than