Page 103 - P1 Integrated Workbook STUDENT 2018
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Variance analysis
Variance analysis
1.1 What is a variance?
A variance is the difference between actual results and the budget or
standard.
Taken together, cost and sales variances can be used to explain the
difference between the budgeted profit for a period and the actual profit.
When actual results are better than expected results, a favourable
(F) variance occurs.
When actual results are worse than expected results, an adverse
variance (A).
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