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Budget variances - what do they indicate about the company?

What is the impact of having a large positive budget variance? (hint, budget $ -actual $= variance $)

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To have a substantial variance when comparing budget to actual, any one of the following events must have taken place:

1. There some kind of change in cost accumulations which is correct, but the budget wasn't modified based on the ...

Solution Summary

The solution explains several possible issues when large variances appear, but goes on to explain the significance of budget variations as a control feature.

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