If a Variance Is Investigated and Determined to Be Random

question 14

Multiple Choice

If a variance is investigated and determined to be random, managers should:

• A) Write off the variance against cost of goods sold
• B) Do nothing
• C) Identify and discipline the employee(s) responsible
• D) Write off the variance against work in process

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Definitions:

Opportunity Costs

The financial sacrifice made by not selecting the alternative that ranks immediately lower when faced with a decision.

Cars

Wheeled motor vehicles used for transportation, typically powered by an internal combustion engine or electric motors.

Computers

Electronic devices capable of processing, storing, and displaying information, used for a wide range of applications from personal computing to complex scientific calculations.

Opportunity Cost

The charge of overlooking the next most beneficial alternative while making a choice.