The chapter describes a variance as a warning that signals that actual results differ from planned results.
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The chapter describes a variance as a warning that signals that actual results differ from planned results. The variance would signal the need to undertake an investigation that would uncover the reason for the variance. Because variances are usually computed long after the fact, operating personnel seldom rely on variances to signal process problems.
Rather they can usually predict variances on the basis of their direct observation of the process. Given this fact, does variance analysis really play any useful role in organizations?
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Related Book For
Advanced Management Accounting
ISBN: 9780132622882
3rd Edition
Authors: Robert S. Kaplan, Anthony A. Atkinson, Kaplan And Atkinson
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