a
Variance is a measure of "relative to the mean, how far away does the other data fall" - it is a measure of dispersion. A high variance would indicate that your data is very much spread out over a large area (random), whereas a low variance would indicate that all your data is very similar.Standard deviation (the square root of the variance) is a measure of "on average, how far away does the data fall from the mean". It can be interpreted in a similar way to the variance, but since it is square rooted, it is less susceptible to outliers.
No. Well not exactly. The square of the standard deviation of a sample, when squared (s2) is an unbiased estimate of the variance of the population. I would not call it crude, but just an estimate. An estimate is an approximate value of the parameter of the population you would like to know (estimand) which in this case is the variance.
actual budget/budget = variance%
Square the standard deviation to obtain the variance. The variance is 62 or 36.
A mix of linear regression and analysis of variance. analysis of covariance is responsible for intergroup variance when analysis of variance is performed.
A favorable/unfavorable price variance does not effect your quantity variance. The reason you would see a favorable price variance and an unfavorable quantity variance is because you consumed more materials than your standard allows AND the price you paid for those material was less than your standard price. If you paid more than your standard price, you would have experienced an unfavorable variance in both quantity and price.
Favourable variance is that variance which is good for business while unfavourable variance is bad for business
A favorable variance is the difference between the budgeted or standard cost and the actual cost. If the actual cost is less than budgeted or standard cost, it is a favorable variance.
A positive variance is not always favorable; it depends on the context. In financial terms, a positive variance in revenue indicates better-than-expected performance, which is favorable. However, a positive variance in expenses could mean costs are higher than budgeted, which is unfavorable. Thus, assessing whether a positive variance is favorable requires understanding the specific metrics and their implications.
A favorable direct materials efficiency variance indicates that you are using less material in production than was budgeted for.
A favorable variance is the difference between the budgeted or standard cost and the actual cost. If the actual cost is less than budgeted or standard cost, it is a favorable variance.
volume variance relates to Fixed cost absorption, where as controllable variances arise due difference in actual variable spending per activity measure.
Favourable fixed overhead variance occurs when actual fixed cost is less than the budgeted fixed overhead expenses.
A favorable direct materials price variance may be the result of the purchase of cheaper materials that may be of inferior quality, thereby causing an inferior product. An inferior quality can also cause more spoilage and waste.
The price variance might result from use of cheaper but inferior quality materials hence though it will be cheaper , the final product will be compromised .
In cost accounting, a variance is the difference between what we expected to happen (what we planned for when we created the budget) and what actually happened. If we produce more units from a given quantity of raw material than we expected to produce when we set up the budget, we have a favorable materials quantity variance, because we produced the goods more efficiently than we had planned for. We have used the raw materials with less waste than expected.
True