Planning and Operational variance

1) In planning variance we are not seeing whether the managers did their job or not but rather we are seeing the differences that are not caused by external factors (ie material costs went up; labour rates went higher etc).

Planning variance is caused by external factors which the operational managers cannot control so they should not be held responsible for them.

2) In operational variance we are seeing whether the managers of the daily operations did their job as planned or not which is caused by the manager paying more for the material and labour.

Operational variance is caused by internal factors which the operational managers can control so they should be held resposible for them.

3) If the variance is favourable then they have done well otherwise if the variance is adverse then they have done bad and it needs to be further investigated.

4) Planning variance see the difference between standard and revised standard.
Operational variance see the difference between actual and revised standard.

5) In costs variance:
Planning variance: if revised standard is more than standard then we have adverse variance but if revised standard is less than standard then we have favourable variance.

Operational variance: if actual is more than revised standard then we have adverse variance but if actual is less than revised standard then we have favourable variance.

Is that all okay?