Explain Variance Analysis with Example?

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jaimyjobish  

  • Member Since Apr-2010 | Apr 16th, 2010


Variance analysis in budgeting or management accounting in general is a tool of budgetary control by evluation of performance by means of variance between budgeted amount, planned amount or standard amt and the actual amt incurred/sold.

Variance can be carried out for both revenue & cost.  Variance analysis hepls the management to know the present cost & then control the future cost.

Examples includes sale price variance, sales quantity variance, sales mix variance.

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jaimyjobish

  • Apr 16th, 2010
 

Variance analysis in budgeting or management accounting in general is a tool of budgetary control by evluation of performance by means of variance between budgeted amount, planned amount or standard amt and the actual amt incurred/sold.

Variance can be carried out for both revenue & cost.  Variance analysis hepls the management to know the present cost & then control the future cost.

Examples includes sale price variance, sales quantity variance, sales mix variance.

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