2.2.4 - Variance

Question 1

The variance

Formula

Answer 1

difference between the budgeted and actual figures

actual figure - budgeted figure

Question 2

Positive variance AKA

Answer 2

Favourable variance

Question 3

Negative variance

Answer 3

Adverse variance ( when actual figures are worse than budgeted ones)

Question 4

When and how can Variance analysis be used for

Answer 4

Be used to analyse the accuracy of the budgeting process and investigate it