Which of the Following Statements About Management by Exception Is

question 164

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 20% of the budgeted amount.
• 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:

Expenses

It refers to the outflow of cash or other valuable assets from a person or company to another entity as a result of purchasing goods or services.

Related Revenues

Income that is directly connected to the primary operations or activities of a business.

Revenue

The total income generated by a business from its normal business operations, such as sales of goods or services.

Earned

Income or revenue that has been generated from business activities or services provided.