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.

---

Definitions:

Final User

The end consumer who uses the product or service for its intended purpose, as opposed to those who might purchase for resale or to implement in another product.

Packaged Goods

Products that are manufactured and sold in containers or wrappers, often with branding and information about the product included.

Free Sample

A product or service provided to potential customers for free to allow them to try before making a purchasing decision.

Trial

A method of marketing where consumers are given the opportunity to use a product or service for a limited time to test its effectiveness or suitability.