Which of the Following Variances Would Not Be Investigated by a Manager

question 70

Multiple Choice

Which of the following variances would not be investigated by a manager following the management by exception principle?

• A)A 10% favorable variance in raw materials price
• B)A 10% unfavorable variance in direct labor rates
• C)A 10% unfavorable variance in payroll tax expense
• D)An unfavorable variance that has increased by 5% in each of the last five months

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Definitions:

Existing Current Assets

Current assets that have been on a company's balance sheet for an extended period and include cash, accounts receivable, inventory, and other short-term assets.

Voluntary Deductions

Optional deductions from an employee's paycheck, such as for health insurance or retirement savings plans.

FICA Taxes

Taxes imposed on both employees and employers to fund Social Security and Medicare, based on a percentage of the employees' wages.

Gross Earnings

The total income earned by an individual or business before any deductions or taxes.