Management by exception: The process of analyzing the difference between expected performance and actual performance and determining that part of the business operation where the attention of management is required utmost is called management by exception. Under management by exception, the variances with small value are ignored, considering it would be a waste of time for the management. But the variances with high value are considered worth investigating because of its significant effects on business operation in future. To determine : 1. Journalize recording of company’s cost and variances for the month. 2. Identify the variances that would attract the attention of a manager who uses management by exception and explain what actions the manager should consider.

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Chapter 23, Problem 6APSA

To determine

Management by exception:

The process of analyzing the difference between expected performance and actual performance and determining that part of the business operation where the attention of management is required utmost is called management by exception. Under management by exception, the variances with small value are ignored, considering it would be a waste of time for the management. But the variances with high value are considered worth investigating because of its significant effects on business operation in future.

To determine:

1. Journalize recording of company’s cost and variances for the month.

2. Identify the variances that would attract the attention of a manager who uses management by exception and explain what actions the manager should consider.

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