Management by exception: Management by exception can be defined as the process of examining the operational and financial results of a company and then putting forward any issues in front of the management, if results show significant differences from the budgeted or expected amount. In other words, the actual results are compared with the expected results after the formulation of standards. When actual results do not meet the standards, then it draws the manager’s attention and desired steps are initiated to control costs. To identify: The variances that are of great concern to the company.

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Chapter 21, Problem 6E

To determine

Management by exception:

Management by exception can be defined as the process of examining the operational and financial results of a company and then putting forward any issues in front of the management, if results show significant differences from the budgeted or expected amount.

In other words, the actual results are compared with the expected results after the formulation of standards. When actual results do not meet the standards, then it draws the manager’s attention and desired steps are initiated to control costs.

To identify: The variances that are of great concern to the company.

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