A Company Has a Policy "Investigate All Variances Exceeding $3,000

question 181

Multiple Choice

A company has a policy "investigate all variances exceeding $3,000 or 15% of the budgeted cost, whichever is lower." There is a variance of $2,000 in repair and maintenance costs of $12,000. What does the company do in the given situation?

• A) It should be ignored as it is less than $3,000.
• B) It deserves more attention as it is more than 15% of total repair cost.
• C) It should be considered an in-control occurrence.
• D) It should be investigated as all variances are equally important.

---

Definitions:

New France

A territory in North America colonized by France from the 16th to the 18th century, including parts of what are now Canada and the United States.

Jesuits

A religious order of the Catholic Church founded by Ignatius of Loyola, known for its educational, missionary, and charitable works.

Huron

Indigenous peoples of North America who originally inhabited the area of what is now Ontario, Canada, known for their farming and trading.

Large-Scale Conversions

The widespread adoption of a new religion or belief system by a large group of people, often occurring rapidly.