Which of the Following Is True of the Exception Principle

question 74

Multiple Choice

Which of the following is true of the exception principle?

• A) The exception principle is beneficial when it helps supervisors manage their time wisely and motivate employees.
• B) According to the exception principle, supervisors should take action only when the variance is measurable.
• C) The exception principle is applied by the top managers during strategic planning when they set objectives for an organization as a whole.
• D) According to the exception principle, supervisors should avoid comparing actual performance with standards set by them.

Evaluate the role of service departments within a company and how their costs are allocated to operating departments.

Analyze the financial implications of internal transfers and cost allocations on divisional performance.

Identify the effects of peak-period demand on budgeting and cost allocations.

Understand policies for service department cost allocation and evaluate their effectiveness.

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Definitions:

Value Creation

The process through which businesses or organizations generate increased worth for shareholders or stakeholders, often through strategic decision-making and operations.

Cash Payments

Cash payments are transactions that involve the transfer of actual cash from one party to another, usually as payment for goods, services, or obligations.

Selling

Selling involves the exchange of goods or services for money or value, constituting a fundamental activity in business to generate revenue.

Administrative Expenses

Costs related to the general operation and management of a business including office supplies, salaries of non-sales personnel, and rental fees.