When Using Management by Exception, a Difference Between Actual Costs

question 108

Multiple Choice

When using management by exception, a difference between actual costs and budgeted costs

• A)should be investigated if the amount is large.
• B)indicates that the planned cost was poorly estimated.
• C)indicates that the manager is doing a poor job.
• D)should be ignored if it increases profit.

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Definitions:

FOB Shipping Point

A shipping term indicating that the buyer assumes ownership and responsibility for goods once they are shipped, and must pay for shipping costs.