Calculating, Classifying and Explaining Budget Variances

What this note covers

1. What Is a Budget Variance and Why Does It Matter?
2. Calculating and Classifying Variances: The Rules
3. Explaining Variances: Internal and External Causes
4. Worked Example: Full Variance Analysis Report for Maplewood Stationery
5. Variance Analysis for Cash Budgets
6. Variance Analysis as a Management Control Tool
7. Budgeting Assumptions and the Qualitative Characteristics

7 sections · 14 key terms & formulas · 6 common mistakes