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Which of the following circumstances best demonstrates the main reason that require planning and operational variances analysis for a manufacturing business. TH produces pre cooked meals with imported ingredient:
1. An outbreak of unpredicted pandemic during the year that disturbed the global supply.
2. TH operates in highly regulated market with strong protectionism measures adopted by the government.
3. A recent enforcement of new minimum wage act before TH Co finialise its budget.
4. TH CO appointed accountant to replace the existing management accountant who have been working with the company since its inception before TH CO finilise its budget.
Please confirm if no 1 is the right answer.An outbreak of unpredicted pandemic during the year that disturbed the global supply.
Is correct!!This situation exemplifies the need for planning and operational variances because it involves external factors beyond the control of the managers, which can significantly impact the budget and operations. Planning variances would account for the changes in plans due to the pandemic, while operational variances would assess how well the managers adapted to these changes.
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