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” The use of planning variance and operational variance splits responsibility for performance between managers in charge of day to day activities and decisions and those in charge of budgeting.”
1. How this statement is true?
2. My issue is that, what variance is allocated to those in charge of budgeting? Planning variance?The budgets are plans, and if the plans change for any reason (whether, for example, it be simply that the cost of materials rises above what was budgeted, or whether it be because they decided to deliberately buy more expensive materials) then the budgets/plans change and there will be planning variances. It is the responsibility of whoever prepared the budgets/plans.
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