What Is the Most Viable Rule of Thumb for Choosing

question 89

Multiple Choice

What is the most viable rule of thumb for choosing variances that should be investigated?

• A) Greater than $10 000 or greater than 10 per cent of standard cost
• B) Greater than 50 per cent of standard
• C) Never investigate favourable variances
• D) Always investigate unfavourable variances

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Definitions:

Inflationary Condition

An economic situation characterized by an increase in prices and a decrease in the purchasing value of money.

Gross Income

The total income earned by an individual or organization before any deductions, such as taxes or expenses, are applied.

U.S. Census Bureau

A key institution in the U.S. Federal Statistical System that creates statistical data on the American population and economic activities.

Disposable Income

The total funds available to households for saving and spending after subtracting income taxes.