Variance Analysis
Finance
Variance Analysis
Systematic comparison of actual results with budget, forecast or standard to explain deviations.
Examples
- 01Variance analysis shows that 60 % of the cost increase came from higher material prices and 40 % from lower output.
- 02The monthly variance analysis is presented to the plant manager with one owner and one action for every major deviation.
- 03Without variance analysis, the team would have blamed the line for the cost increase, when most of it came from purchasing prices.