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Budget variance is calculated using variance analysis to compare planned, or budgeted, amounts to actual amounts. Variance analysis is a quantitative examination of the differences between budgeted and actual amounts, according to AccountingTools.


To calculate simple variance, also called sample variance, start by calculating the mean of the set of numbers. Next, subtract the mean and square the result for each number. Finally, add the squared results, and divide this sum by one less than the number of data points.


Calculate variance by finding the average of the square of the data values' differences from the mean. You need the data values, mean, squared mean difference and the number of data values in the data set.


There are two basic ways of calculating variance in Excel using the function VAR or VAR.S. These functions can then calculate variance in several ways: use of numbers in arguments of function =VAR(2,3,4,5,6,7,8,125), use of cells as arguments in the formula =VAR(A2,A3,A4,A5), use of a range of cells


A flexible budget is one that can flex or adjust as needs change, as noted by Accounting Coach. This type of budget differs from a static budget that remains at the same amount regardless of changing needs.


Schedule variance occurs when the time needed to complete a project is different from the time scheduled for completion. In some cases projects get completed early. However, schedule variance more often refers to situations in which the timeline for completion exceeds the amount scheduled.


To calculate the sample variance of a population, first determine the mean of the sample, subtract each data point from the mean, square each resulting number, add all the squared results together, and then divide that number by the total number of points in the data set minus one. A one is subtract


The information found in a flexible budget report includes expenditure levels for variable costs and tools for comparing actual to budgeted performance. This budget is dependent upon changes in revenue and activity levels experienced.


According to AZCentral.com, flexible budgets are advantageous because they reduce the chances of encountering unforeseen problems and take advantage of unexpected opportunities. Flexible budgets also help avoid overspending, which can decrease labor costs for businesses.


Variance analysis accounts for discrepancies between planned events and what actually takes place. It is generally performed at the end of each fiscal month and reported to management. Variance analysis is particularly useful in markets with consistent monthly trends.