budget-sec12A_6

budget-sec12A_6 - Variance Analysis: William J. Ward, Jr.,...

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Unformatted text preview: Variance Analysis: William J. Ward, Jr., MBA Variance Analysis Section A William J. Ward, Jr., MBA Johns Hopkins University What It Is Variance Analysis Variance Analysis Determining the underlying causes of performance deviations Allows management to determine appropriate action Communication, action planning, and anticipation Difference between actual and plan Part of the cycle of management Analysis vs. reporting Anecdotal analysis 3 The Cycle of Management Actual Results Variance Analysis Performance Analyses (Variance, Spending, etc.) Forecasting Will Budgeted Results be Achieved? Action Plan 4 Difference between the actual and the plan Part of the cycle of management Analysis vs. reporting Anecdotal analysis Operating Budget Yes No Await Subsequent Reports 5 6 Variance Analysis: William J. Ward, Jr., MBA Potential Causes of Variances Only three causes 1. Volume of business 2. Prices of things used 3. Quantities of things used in business Volume variance Price or labor rate variance Usage or efficiency variance 7 ...
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This note was uploaded on 01/29/2012 for the course PH 551.603 taught by Professor / during the Spring '12 term at Johns Hopkins.

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budget-sec12A_6 - Variance Analysis: William J. Ward, Jr.,...

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