Factors to Consider When Writing a Variance Report higher and supplies lower than the original budget, the following factors will be taken into account when deciding which discrepancies to investigate: Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get the original essayThe first thing to consider is the reliability and accuracy of the figures provided. It is strongly recognized that errors in accounting for budget documents or in recording actual costs and revenues could result in variances being reported when there is actually no error. Second, there is the question of materiality; which has to do with the volume of variance which shows the degree of the problem and the likely benefits from its rectification. Additionally, it is necessary to examine the interdependencies of the gaps. Sometimes a gap in one aspect is always linked to a gap in another area. Take for example; A favorable variance in raw material prices resulting from purchasing lower quality material can result in an unfavorable variance in labor efficiency because the lower quality material is more difficult to work with. These two discrepancies should be considered together before making an investigative decision. Additionally, intrinsic variability in costs or revenues is also vital. Unfavorable variance will likely attract more attention because it means trouble. However, there is debate about analyzing favorable variances so that a company can study from its successes. An unfavorable deviation can be caused by a random event. A series of adverse deviations generally indicates that a procedure is out of control. Another factor is controllability/probability of correction. If a cost or income is beyond the manager's control (such as the world price of a commodity), there is no point in examining the cause. Assuming that the cost of correcting the problem is likely greater than the benefit, there is no point in further investigation. (Neal, 2014) Relationship Between Variances There could be a relationship between direct material variances and direct labor variances. In fact, many, if not all, of the discrepancies may be related. Assuming that a less expensive material is purchased in order to achieve a favorable price variance, if the materials have unnecessary attributes, it is possible that an unfavorable variance in material usage could result. If material characteristics result in additional labor hours, a direct adverse change in labor efficiency will result. If the materials require more experienced labor, a labor rate variance may also occur. (Turner, 2001)Variance Interpretation ReportBusiness organizations typically tidy up a budget reconciliation report that provides management with a synopsis linking actual and expected performance. The report helps identify areas for review in order to take appropriate curative measures and also highlights areas of exceptional performance. It should be noted that deviations may arise during the usual line of operations, due to a more sustainable adjustment of the company's operating environment and because budgets or standards are either too rigid or too flexible. (Bolles, 2007) Actual result of the investigation, 1987)

Essay / Factors to Consider When Writing a Variance Report higher and supplies lower than the original budget, the following factors will be taken into account when deciding which discrepancies to investigate: Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get the original essayThe first thing to consider is the reliability and accuracy of the figures provided. It is strongly recognized that errors in accounting for budget documents or in recording actual costs and revenues could result in variances being reported when there is actually no error. Second, there is the question of materiality; which has to do with the volume of variance which shows the degree of the problem and the likely benefits from its rectification. Additionally, it is necessary to examine the interdependencies of the gaps. Sometimes a gap in one aspect is always linked to a gap in another area. Take for example; A favorable variance in raw material prices resulting from purchasing lower quality material can result in an unfavorable variance in labor efficiency because the lower quality material is more difficult to work with. These two discrepancies should be considered together before making an investigative decision. Additionally, intrinsic variability in costs or revenues is also vital. Unfavorable variance will likely attract more attention because it means trouble. However, there is debate about analyzing favorable variances so that a company can study from its successes. An unfavorable deviation can be caused by a random event. A series of adverse deviations generally indicates that a procedure is out of control. Another factor is controllability/probability of correction. If a cost or income is beyond the manager's control (such as the world price of a commodity), there is no point in examining the cause. Assuming that the cost of correcting the problem is likely greater than the benefit, there is no point in further investigation. (Neal, 2014) Relationship Between Variances There could be a relationship between direct material variances and direct labor variances. In fact, many, if not all, of the discrepancies may be related. Assuming that a less expensive material is purchased in order to achieve a favorable price variance, if the materials have unnecessary attributes, it is possible that an unfavorable variance in material usage could result. If material characteristics result in additional labor hours, a direct adverse change in labor efficiency will result. If the materials require more experienced labor, a labor rate variance may also occur. (Turner, 2001)Variance Interpretation ReportBusiness organizations typically tidy up a budget reconciliation report that provides management with a synopsis linking actual and expected performance. The report helps identify areas for review in order to take appropriate curative measures and also highlights areas of exceptional performance. It should be noted that deviations may arise during the usual line of operations, due to a more sustainable adjustment of the company's operating environment and because budgets or standards are either too rigid or too flexible. (Bolles, 2007) Actual result of the investigation, 1987)

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