Top Management Notices a Variation from Budget and an Investigation

question 198

Multiple Choice

Top management notices a variation from budget and an investigation of the difference reveals that the department manager could not be expected to have controlled the variation. Which of the following statements is applicable?

• A) Department managers should be held accountable for all variances from budgets for their departments.
• B) Department managers should only be held accountable for controllable variances for their departments.
• C) Department managers should be credited for favorable variances even if they are beyond their control.
• D) Department managers' performances should not be evaluated based on actual results to budgeted results.

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Definitions:

Stalagmites

Mineral formations that rise from the floor of a cave due to the accumulation of material deposited by dripping water from the ceiling.

Karst Topography

A landscape formed from the dissolution of soluble rocks such as limestone, dolomite, and gypsum, characterized by underground drainage systems with sinkholes, caves, and disappearing streams.

Steep Pillars

Tall, vertical rock formations resulting from the erosion of surrounding softer material, often seen in high-gradient areas.

Tropical

Relating to or characteristic of the tropics, typically hot and humid climate zones between the Tropic of Cancer and the Tropic of Capricorn.