Downloaded 63 times
More Related Content
Similar to use of Variance analysis
use of Variance analysis
- 1. Use of VarianceAnalysis in Business Introduction to Statistics Course code: STA 101 Section: 02 Submitted to: Mastak Al Amin
- 2. Use of VarianceAnalysis in Business Group Members: • Please write your name/id • Please write your name/id • Please write your name/id • Abrar Hassan Saadi 13104186
- 3. What is Variance? • The difference between an expected and actual result such as between a budget and actual expenditure. • Statistics: The arithmetic mean of the squares of the deviations of all values in a set of numbers from their arithmetic mean.
- 4.
- 5. Variance analysis •Variance analysis, in budgeting (or management accounting in general), is a tool of budgetary control • It assists in evaluating performance by means of variances between budgeted amount, planned amount or standard amount and the actual amount incurred/sold. • Variance analysis can be carried out for both costs and revenues
- 6. Use of varianceanalysis in Business • Budget vs. Actual Costs – Variance analysis is important to assist with managing budgets by controlling budgeted versus actual costs. – Variances between budgeted and actual costs might lead to adjusting business goals, objectives or strategies.
- 7. Use of varianceanalysis in Business • Budget vs. Actual Costs 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 2011 2012 budgeted cost actual cost
- 8. Use of varianceanalysis in Business • Forecasting – It uses patterns of past business data to construct a theory about future performance – Being able to mathematically forecast sales helps understanding demand
- 9. Use of varianceanalysis in Business • Sensibility in competition -Variance of different metrics in a market helps building products more sensibly -analysis of variance in market monitoring indicates key differences which helps towards achieving competitive advantage
- 10. Use of varianceanalysis in Business • Sensibility in competition
- 11.