Question

“Only a 5 % increase in material cost was found critical”. What technique is this?

• A. Break-even analysis
• B. Cost-benefit analysis
• C. Budgetary control
• D. Management by exception

Hint:

Management by exception allows managers to focus their attention on significant variances rather than monitoring every aspect of performance.

Answer 1

The Correct Option is D

The correct answer is Management by exception. Management by exception involves focusing on significant deviations from the expected or standard performance. In this case, only a 5 % increase in material cost is being highlighted, showing that management is focusing on exceptions or critical areas that require attention.