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hi
for the interpretation of adverse planning variance ,what could be the possible reasons for difference between the original and revised. other than the reasons mostly given in the questions(such as due to changes in the market etc etc).in operational variance, we can always be sceptical of the managers performance or other obvious reasons related to the scenario. but in planning what could possibly be said?
thanks
Planning variances occur because we have changed our plans – either because we were forced to by outside events (for example other business increased the rate of pay for their workers, and so we were forced to put up wages permanently); or because we decided to ourselves (for example, we deliberately decided to buy better material and therefore pay more, because we thought it would mean workers could produce faster and so save money there, or because we thought we would end up with a better product and therefore increase the price.
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