Q17RQ - Horngren'S Financial And Managerial Accounting

Question

Question: What is management by exception?

Step-by-Step Solution

Answer

Answer

The management by exception is a tool that helps the management to focus on significant issues.

Step 1 Definition of the management

Management is defined as the process of planning and organizing the resources and activities of the business.

Step 2 Difference of fixed overhead volume from the other variance

Management by exception is a technique that the company managers use to concentrate on the results outside the reasonable variances or the accepted parameters. They can correct them by focussing on the exception and investigating the variances.