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What factors causes Budget Variance?
There are 7 variances associated with a budget ( which are generally calculated for controlling purposes) 1- Material Price variance 2- Material Quantity variance 3- Labor rate variance 4- Labor efficiency variance 5- Spending variance 6- Efficiency variance 7- Capacity variance
What is budget variance?
A budget "variance" is the difference between planned and actual performance.
What difference between a favorable variance and an unfavorable variance?
Favourable variance is that variance which is good for business while unfavourable variance is bad for business
Can Budget variance be negative?
Yes
What are the causes for adverse overhead capacity variance?
Incurring higher fixed costs than were planned for in the budget can cause adverse overhead capacity variance. Other caused can include planning errors, inefficient management of fixed overheads, and business expansion that was not added to the budget.
