Budget variances are the most universal measure of financial performance. A budget variance is the difference between what was budgeted and what actually occurred. For this discussion, answer these questions:

1. What is the value of a flexible budget?

2. Why do these variances merit examination by a department manager?

3 a. Variances greater than specified dollar amounts

b. Variances greater than specified percentages

c. Variances that persist for multiple time periods

d. Why is it difficult to plan or calculate volume variance?