Question

The Gotham Corporation regularly produces budget vs. actual data for its managers. The company is particularly sensitive to personnel costs, and division variances of greater than five percent for any period are promptly investigated to determine if budgeted postions have not been filled or if there has been extraordinary overtime. Timely exception resolution of this character illustrates the information and communication principles typically associated with:

a. Internal Communication.
b. Financial Reporting Information.
c. Internal Control Information.
d. External Communication.

Answer 1

Answer:

Option C Internal Control Information

Explanation:

The reason is that variance analysis is the process through which we emphasize control over costs which is solely management accounting and is not linked to financial reporting so the option B is incorrect. This information is internally generated which means saying that the information is obtained from external sources is totally incorrect. The option a is generally correct because this information is part of internal information. But Option C is more relateable here so the better option is Option C.