Question

Variance analysis is important to the management because:_____.

A. It helps management determine the reasons that actual costs varied from budgeted costs.
B. It helps management determine which department operated most efficiently.
C. It helps management determine the bottleneck of the production line.
D. All of the answers are correct.

Answer 1

D. All of the answers are correct.

Step-by-step explanation:

Given that Variance Analysis is a form of measuring and controlling methods used by a business management team to maintain and monitor the firm's planned cost and sales with the eventual outcome of cost spent and sales generated.

To achieve this, the process helps in determining the disparity between the actual costs of budgeted costs.

It also helps them to know which department is more productive and

It also helps to discover where the problems or difficulties exist in the production process

Hence, in this case, the correct answer is option D, All of the above. Because the option A to C satisfies the answer.