Hi, is there any guidance for deciding when an operational or planning variance is favourable or adverse. While I always get the calculations right It is difficult to determine whether the variance is favourable or adverse.
For. e.g if the revised is less than the actual for operational is it adverse or vice versa and if the original is more/less than the revised for planning is it Adverse of favourable?
Please help. I always get the calculations but can’t figure out (F) or (A)
Thank you.
ACCA Forums
PMPLANNING AND OPERATIONAL VARIANCES
Think in terms of profit. If the variance made profit higher than planned it's favourable, other way round it's adverse.
If a revenue is higher than planned, that's favourable, but if an expense is higher than planned, it's adverse.
Sign into reply to this topic.