Mannock Company Budgeted $400,000 for Employee Training, but Actually Spent

Mannock Company budgeted $400,000 for employee training, but actually spent only $300,000. Which of the following statements is the best course of action for management to take in this instance?

A) Because this $100,000 variance is favourable, management does not need to investigate further.
B) Management will investigate this $100,000 favourable variance to ensure that the cost savings do not reflect a reduction in programming.
C) Management will investigate this $100,000 favourable variance to try to identify and correct the problem with budgeting system.
D) Management should not investigate every variance, especially the favourable ones.
E) Management should hold a meeting with the budget department and the training department to ensure that next year's budget is more realistic.

Correct Answer:

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