To make sure that managers interpret variances correctly and make appropriate decisions based on them,managers need to recognise that variances can have ___________ cause(s).

Question

Quizplus · Accepted Answer

Variances can have multiple causes, which could include factors such as changes in sales volume, changes in price levels, or changes in production costs. By recognizing that there can be multiple causes for a variance, managers can conduct a more thorough analysis of the situation and make more informed decisions. Ambiguity or unknown causes could lead to incorrect interpretations and decisions. Having only one cause would make the analysis too simplistic and may miss other contributing factors.

To Make Sure That Managers Interpret Variances Correctly and Make