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Variances in Budgets: Definition, Calculations & Analysis

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

What are variances in budgets?

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1. Why do we calculate variances between actual activity and the budget?

2. How do we calculate variances to budget?

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About This Quiz & Worksheet

Your ability to understand variance and its role in budgeting is assessed in this quiz/worksheet combination. You will be asked about variance calculation, to define price volume analysis, and explain how to calculate prince and volume differences.

Quiz & Worksheet Goals

This assessment will test your ability to:

  • Define variance in budges
  • Explain the usefulness of variances
  • Explain how to calculate variance
  • Define price volume analysis
  • Explain the usefulness of calculate price and volume differences

Skills Practiced

This assessment will test the following skills:

  • Critical thinking - apply relevant concepts to examine information about budgets in a different light
  • Problem solving - use acquired knowledge to solve variance calculation practice problems
  • Interpreting information - verify that you can read information regarding price volume analysis and interpret it correctly
  • Defining key concepts - ensure that you can accurately define variance, budget, and actual

Additional Learning

In business a budget helps a company plan. Review this lesson on calculating variances to understand how this number can help companies revise their plan as needed. This lesson covers:

  • Defining variances in budgets
  • Calculating variances
  • Analyzing variances
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