If a variance is investigated and determined to be random, managers should:
A) Write off the variance against cost of goods sold
B) Do nothing
C) Identify and discipline the employee(s) responsible
D) Write off the variance against work in process

Question

Quizplus · Accepted Answer

If a variance is determined to be random, it means that it is not caused by any specific employee or action, but rather due to natural fluctuations in the system. Therefore, there is no need to write it off or discipline anyone. Managers should simply do nothing and continue monitoring the situation.

If a Variance Is Investigated and Determined to Be Random