Variances (variance analysis)

IB Business Management: Variances (variance analysis)

A variance refers to a discrepancy between the planned (budgeted) item of expenditure or revenue and the actual amount. For example, if Warner Bros planned to spend $150m on producing a Hollywood movie, but ended up spending $180m, then there would be a variance of $30m. Similarly, if Foxconn, Taiwan’s largest manufacturer, planned to produce 50m smartphones but higher than expected sales meant it needed to produce...


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