Variance Analysis Case Study:
Variance analysis is the calculated difference of the two numbers which illustrate the planned cost of the production and its actual cost. The importance of variance analysis is quite high, because every company which produces something possesses a certain amount of money or budget and it relies only on this sum and can not afford further unpredictable expenditures. So, when the group of managers plan to produce certain goods, they calculate the possible expenditures which can occur in the process of production and trade. It is obvious that the expenditures can be different on practise, generally lower and this difference between the planned and the actual cost of production is investigated by the experts who work on the variance analysis. Continue reading