A. The behavior of the variance (negative or positive) should not influence the decision of whether to investigate or not to investigate the variance. The variance is the measure of how much the actual results vary from the budgeted (expected) results. All significant variances should be investigated. It is also critical that benefits from variance investigation exceed its costs.

B. The magnitude (amount) of the variance should be considered in determining whether or not to investigate a variance. Management should give more attention to significant variances, measuring how material the variance is. It is critical that benefits from variance investigation exceed its costs.

C. The trend of the variances over time should be considered in determining whether or not to investigate a variance. It is important to investigate variances when there is a strong tendency of unfavorable variances to increase.

D. The investigation of any variance. especially an unfavorable one, should take place in order to eliminate future occurrences of the variance. Part of the process should be to plan and take corrective actions. If an investigation would not result in any changes that could eliminate future occurrences of the variance, then the benefit to be gained from the investigation would not be worth the cost of the investigation.