As the operational manager of a production facility, assume that you have asked to be notified of all variances that are in excess (in either direction) of 10% of standard. As such, you are practicing management by exception decentralized management participative management management by objectives differential analysis Question 30 2 pts When creating financial statements, why is it essential to create the income statement before the balance sheet? Because net income is required to determine the balance in retained earnings Because sales is an essential component of the balance sheet Because cost of goods sold is a component of inventory Because S&A costs are required to determine the balance in Plant \& Equipment (net). Actually, the balance sheet must always be created first and used to create the income statement