Question

For performance reports to be most effective for management by exception, they should:

1) be issued at the same time for all responsibility centers.
2) be held until the financial statements for the month have been issued.
3) be issued as soon after the activity or period covered as possible.
4) show all of the costs associated with the responsibility center being reported about.

Answer 1

Performance reports should be issued as soon as possible, show all costs associated with the responsibility center, and sometimes be held until financial statements are issued. So the correct answer is option 1,2,3.

Step-by-step explanation:

For performance reports to be most effective for management by exception, they should:

1. be issued as soon after the activity or period covered as possible
2. show all of the costs associated with the responsibility center being reported about
3. be held until the financial statements for the month have been issued

Issuing performance reports as soon as possible allows management to identify and address any exceptions or deviations from expected performance in a timely manner. Showing all costs associated with the responsibility center provides a comprehensive view of its performance.

Holding the reports until the financial statements are issued ensures that the reports are based on accurate and complete financial data.