Question 1
Materiality can be measured in terms of
◦ efficiency.
◦ whether favorable or unfavorable.
◦ absolute dollars.
◦ type of variance.
Question 2
Which of the following are factors that managers may use in deciding whether to investigate a variance?
◦ Whether the variance will increase or decrease operating income and materiality
◦ Materiality and the effect of netting large and small variances
◦ Materiality and whether the variance will increase or decrease total costs
◦ The effect of netting large and small variances and whether favorable or unfavorable