Purchase Solution

Explain why variance analysis is important.

Not what you're looking for?

Ask Custom Question

1) How does planning of fixed overhead costs differ from planning of variable overhead costs? Can you think of fixed and variable costs in your personal budget?

2) Explain why variance analysis is important.

Purchase this Solution

Solution Summary

The expert explains why variance analysis is important. The response is 331 words in everyday language suitable for a novice.

Solution Preview

Fixed overhead is easier to plan because you don't have to presume some expected level of activity. Like property taxes. You don't have to know how many units you are going to produce, who you are going to hire, and whether the winter months will be colder than usual. Activity does not impact it so you don't have to consider it. Variable overhead costs, however, change based on activity so to budget them, you have to know the levels of activity of the ...

Solution provided by:
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
Recent Feedback
  • "hey just wanted to know if you used 0% for the risk free rate and if you didn't if you could adjust it please and thank you "
  • "Thank, this is more clear to me now."
  • "Awesome job! "
  • "ty"
  • "Great Analysis, thank you so much"
Purchase this Solution


Free BrainMass Quizzes
SWOT

This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.

Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.

Managing the Older Worker

This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce

Production and cost theory

Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.

Operations Management

This quiz tests a student's knowledge about Operations Management