The process of calculating variances and analysing the reasons they occurred is called
A) Variance analysis
B) Budget analysis
C) Historical analysis
D) Activity-based analysis

Question

Quizplus · Accepted Answer

Variance analysis is the process of comparing actual results to budgeted or expected results in order to identify and understand the reasons why there were variances or differences. This analysis can help management make decisions on how to improve operations, reduce costs, and increase profitability. Budget analysis looks at the overall budget and determines whether actual spending is above or below budgeted amounts. Historical analysis looks at past trends and performance to gain insights into future performance. Activity-based analysis focuses on identifying and analyzing the activities that drive costs in order to improve efficiency and effectiveness.

The Process of Calculating Variances and Analysing the Reasons They