Podcast
Play an AI-generated podcast conversation about this lesson
Questions and Answers
What is the purpose of variance analysis?
What is the purpose of variance analysis?
- Forecasting future performance
- Determining the cause of difference between baseline and actual performance (correct)
- Evaluating the effectiveness of marketing strategies
- Calculating the rate of return on investment
What aspects does variance analysis compare?
What aspects does variance analysis compare?
- Individual and team performance
- Current and future performance
- Baseline and actual performance (correct)
- Company's performance and industry average
Which of the following is not a function of variance analysis?
Which of the following is not a function of variance analysis?
- Assessing the degree of difference from the baseline
- Determining the cause of performance deviations
- Predicting future stock prices (correct)
- Identifying areas of improvement in performance
Study Notes
Variance Analysis
- The purpose of variance analysis is to identify and explain the differences between actual and planned outcomes in a business or organization.
- Variance analysis compares actual results with standard or budgeted costs, revenues, and profits to identify areas of improvement.
- It compares aspects such as:
- Actual costs vs. standard costs
- Actual revenues vs. budgeted revenues
- Actual profits vs. planned profits
- One of the functions of variance analysis is not to make predictions or forecasts about future outcomes.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Test your knowledge of variance analysis with this quiz! Explore different techniques used to determine the causes and degrees of difference between baseline and actual performance. Challenge yourself and enhance your understanding of this important analytical tool.
