1.Variance analysis is important to the management because:

Group of answer choices

It helps management determine the reasons that actual costs varied from budgeted costs.

It helps management determine which department operated most efficiently.

It helps management determine the bottleneck of the production line.

All of the answers are correct.

2. The Total Liabilities to Total Assets ratio helps lenders such as a bank to monitor a loan to prevent the borrower from

Group of answer choices

Investing more of their money in the company

Generating enough cash flow to be able to repay a loan

Taking out more loans and increasing their total liabilities

Buying more plant and equipment to grow their business

3.

Which of the following statements is false?

Group of answer choices

Actual sales exceeded budgeted sales indicating an favorable variance

Actual expenses exceeded budgeted expenses indicating an unfavorable variance

Variance means that performance fell short of expectations

Small variance probably indicate random factors at work.

4. A passive investor

Group of answer choices

Has no interest in the company in which he or she has invested

Is shy and unlikely to ask hard questions

Is not involved in the day to day operations of the company

Is an active manager in the company

Has access to the company's financial statements information, but must rely on the public financial statements' information