Suppose a company budgets \(\$ 5\) million for customer service costs but actually spends \(\$ 4\) million.

a. Because this \(\$ 1\) million variance is favorable, management does not need to investigate further.

b. Management will investigate this \(\$ 1\) million unfavorable variance to try to identify and then correct the problem that led to the unfavorable variance.

c. Management will investigate this \(\$ 1\) million favorable variance to ensure that the cost savings do not reflect skimping on customer service.

d. Management should focus its investigation on unfavorable variances.