Question

management by exception only looks at the small favorable variances because they should be eliminated by management. group of answer choices true false

Answer 1

The statement is false. Management by exception focuses on significant and unfavorable variances, but it might also consider large favorable variances to ensure they are sustainable.

Step-by-step explanation:

The statement that management by exception only looks at the small favorable variances is false. Management by exception is a management strategy where only significant deviations from a budget, plan, or standard are brought to the attention of management. The focus is typically on significant and unfavorable variances, as they are considered potential indicators of problems that need to be addressed. However, managers might also look at favorable variances that are exceptionally large to understand the underlying reasons and ensure they are sustainable. The aim is to optimize management's time by focusing their attention where it is most needed.