Answer (D) is correct . A variance shows a deviation of actual results from the expected or budgeted results. All significant variances should be investigated, whether favorable or unfavorable.
Answer (A) is incorrect because Only significant variances should be investigated. Also, the benefits of each step in the entire standard-cost process must be cost effective. Benefits should exceed costs.
Answer (B) is incorrect because The trend of variances over time should be considered. A negative variance that has been getting progressively smaller may not need investigating, whereas a variance that is increasing should be investigated promptly.
Answer (C) is incorrect because The objective of variance investigation is pinpointing responsibility and taking corrective action toward eliminating variances.
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