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Rules for Investigating Cost Variances

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  • Richard M. Duvall

    (The University of Tennessee)

Abstract

Several writers have suggested quality control procedures in order to determine when an observed variance of actual cost from standard cost should be investigated in order to determine if the variance is due to non-standard performance. These procedures do not explicitly consider the cost of an investigation and the benefits derived from discovering and correcting the cause for the variance. The purpose of this paper is to indicate how these costs may be made a part of the decision to investigate a given cost variance.

Suggested Citation

  • Richard M. Duvall, 1967. "Rules for Investigating Cost Variances," Management Science, INFORMS, vol. 13(10), pages 631-641, June.
    • Handle: RePEc:inm:ormnsc:v:13:y:1967:i:10:p:b631-b641
    DOI: 10.1287/mnsc.13.10.B631
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    Cited by:

    1. Łukasz Kuźmiński & Zdzisław Kes & Veselin Draskovic & Andrzej Gawlik & Marcin Rabe & Katarzyna Widera & Agnieszka Łopatka & Maciej Śniegowski, 2023. "Modelling of the Risk of Budget Variances of Cost Energy Consumption Using Probabilistic Quantification," Energies, MDPI, vol. 16(5), pages 1-16, March.

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