BUSINESS ADMINISTRATION
ACCOUNTING FOR MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Cost accountant
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Management
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Both a and b
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None of the above
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Detailed explanation-1: -Management is responsible for careful evaluation of variances.
Detailed explanation-2: -Corrective actions are applied to the causes of variance by observing the risk factor, both the highest and lowest risk factors, in an effort to prevent deviation in material management.
Detailed explanation-3: -Variance analysis is a method of assessing the difference between estimated budgets and actual numbers. It’s a quantitative method that helps to maintain better control over a business.
Detailed explanation-4: -Variance analysis is used in budgeting and management accounting. It is a study of the variation (difference) between an actual (forecasted) action and a planned action. Variance analysis carries out a quantitative investigation to find out the difference between the actual cost and the standard cost of production.