Budgetary Control
Monitoring actual performance against budgets; taking corrective actions.
Formula
Variance = Budgeted Figure − Actual Figure
Real World
JD Sports monitors monthly sales against its revenue budget; if actual sales fall short, managers investigate whether poor weather or competitor promotions caused the adverse variance.
Exam Focus
Always state whether a variance is adverse or favourable and explain the consequence — answers that just calculate the number rarely reach full marks.
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