Which of the Following Is True of Variance

question 154

Multiple Choice

Which of the following is true of variance?

• A) Managers should interpret a favorable variance as "good news" or assume it means their subordinates performed well.
• B) A variance within an acceptable range is considered to be an "in-control occurrence" and calls for no investigation or action by managers.
• C) The purchasing manager secured a discount for buying in bulk with fewer purchase orders which results in unfavorable material price variance.
• D) Managers' performance must be evaluated solely on single variance.

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Definitions:

Performance

The act or process of carrying out or accomplishing an action, task, or function.

Environmental Law

A body of laws and regulations designed to protect the environment from harm caused by human activities.

Corporate Firm

A corporate firm is a legal entity recognized by law, created by individuals or shareholders, with the purpose of engaging in commercial activities, often characterized by limited liability, perpetual succession, and the ability to raise capital.

Real Estate

Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water.