Question

All of the following factors should influence the decision to investigate a variance except:

Multiple Choice
a. Materiality of the variance amount.
b. Frequency of occurrence.
c. The direction of the variance (favorable or unfavorable).
d. Capacity for management to control.

Answer 1

c. The direction of the variance (favorable or unfavorable).

Step-by-step explanation:

During the process of investigation of the variance ,

Materiality of the variance amount is considered , as the small variances are analyzed or not analyzed , but to a very low extent .

Frequency of occurrence , is important .

And the capacity of the management to control .

The direction of the variance , even it it is non favorable but the amount small , then there is no need for the investigation .