What aspects of variances should managers consider in deciding which variances to investigate?
What will be an ideal response?
Answers will vary.
When deciding which variances to investigate, managers should consider the materiality of a variance, the frequency with which it occurs, their ability to control the variance, and the characteristics of the items behind the variance. For example, a favorable variance in maintenance costs might indicate that a manager has been delaying needed maintenance.
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Indicate whether the statement is true or false