Variance analysis
You'll learn how variance analysis works as a practical tool for measuring actual performance against budgets and identifying where to take action.
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In this lesson
- 0:00 Introduction to Variance Analysis
- 0:28 Variance Analysis: Purpose and Process
- 1:14 Setting Investigation Thresholds
- 2:12 Adverse vs Favourable Variances
- 3:04 Reasons for Variances Occurring
- 4:14 Sales Volume and Price Variances
- 6:56 Material Price and Usage Variances
- 8:55 Labour Rate, Efficiency and Idle Time
- 11:45 Variable and Fixed Overhead Variances
- 16:07 Planning vs Operational Variances
About this lesson
This video covers the key variances you need to know—sales, material, labour, overhead, and planning variances—along with the reasons behind each one and how to interpret them in an exam context. You'll understand how to calculate variances, distinguish between favourable and adverse results, and recognise when variances signal genuine operational issues versus planning problems. By separating planning variances from operational variances, you'll see how to fairly assess performance and target improvements where they matter most.
Duration: 19m
Transcript
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