Troy Company Budgeted $12 Million for Customer Service Costs, but Actually

Troy Company budgeted $12 million for customer service costs, but actually spent only $10 million. Which of the following statements is the best course of action for management to take in this instance?

A) Management will investigate this $2 million favorable variance to ensure that the cost savings do not reflect skimping on customer service.
B) Because this $2 million variance is favorable, management does not need to investigate further.
C) Management will investigate this $2 million unfavorable variance to try to identify and correct the problem.
D) Management should not investigate every major variance, especially the unfavorable ones.

Correct Answer:

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