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What is Variance?
In standard costing and budget control, variance constitutes the difference between the budgeted costs and the actual costs for an activity.
Variance encompasses both a comparision of the budgeted and the actual income or costs as well as the effects of the differences on the performance of an entity.
Two types of variance results exist in terms of the variance effect:
In standard costing and budget control, variance analyses are performed when the income or cost variance is divided into sub-variances in order to establish the reason for the difference between the expected income or costs and the actual results.
There are many different types of sub-variances. The most important include:
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