Variance refers to the difference between planned and actual performance. Planned performance may be quantified in budget or actual performance. Planned performance may be quantified in budget or expressed as standard costs or any other statement. Thus, variance is a general term and not specific to the standard costing system. Variance Accounting: It is defined as 'A technique whereby the [...]
The following article will guide you about how to calculate cost variances in accounts. Treatment of Cost Variances in Accounts: For firms that use standard costing system, accounting for variances in internal reporting at the end of the period is an important decision. The decision influences both inventory valuation and income measurement. Divergent views exist among accountants as to the [...]
Get the answer of: What is Variance Analysis? 'Variance' is the difference between planned, budgeted or standard cost and actual costs and similarly in respect of revenues. This should not be confused with the statistical variance which measures the dispersion of a statistical population. 'Variance Accounting' is a technique whereby the planned activities of an undertaking are quantified in budgets, [...]