centers.

exception is a term often used in performance evaluation. Describe management by exception and how it is used in the evaluation of cost$,$ revenue, and profit

Performance reports for cost, revenue, and profit centers typically list both actual and budgeted amounts, along with dollar and percentage variances exception is a tool that allows management to focus its attention on important differences between actual and budgeted amounts

Management by

Using management by exception, management only investigates variances exceeding a certain dollar amount and$/$or variances exceeding a certain percentage

Management does not bother investigating smaller variances, since the cost would most likely outweigh the benefits

For $$ centers, management would focus on the difference between the actual results and the $$ budget. $$ centers could look at both the flexible budget variance and the sales volume variance. $$ centers are responsible for both generating revenue and controlling costs, so review both of these variances.