Accounting Reports Question:

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.