Which of the Following Statements About Management by Exception Is

question 3

Multiple Choice

Which of the following statements about management by exception is incorrect?

• A) Managers concentrate on results that are outside the accepted parameters.
• B) There is no need to investigate variances that are less than 10%.
• C) Exceptions can be expressed as a percentage of a budgeted amount or a dollar amount.
• D) Many companies use a combination of percentages and dollar amounts.

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Definitions:

Corporate Veil

A legal concept that separates the identity of a corporation from its shareholders, protecting them from being personally liable for the company’s debts and obligations.

Closely Held Corporations

Companies whose shares are owned by a small group of individuals or families, often with restricted stock sales.

Parent-subsidiary Relationships

The connection between a parent company that controls another company (subsidiary) through ownership of a majority of voting stock or influence.

RMBCA

Stands for the Revised Model Business Corporation Act, which is a model set of laws proposed to standardize the regulation of corporations across the United States.