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Variance

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Variance

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by AvatarJohn Moffat.
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  • July 15, 2021 at 6:38 pm #627877
    Avatarsadafwaheed1
    Participant
    • Topics: 84
    • Replies: 32
    • ☆☆

    Sir the following statement is false can you please explain this statement why is it false there is no reason given in the kit?

    Variance analysis results will take into account important criteria such as customer satisfaction or quality of production

    July 16, 2021 at 7:57 am #627900
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54837
    • ☆☆☆☆☆

    The analysis simply tells us that something has gone better or worse than expected, but it does not tell us why.

    It could well be that, for example, am adverse sales volume variance is due to poor customer satisfaction. However the analysis only tells us that sales are lower – it is then up to the company to investigate the reasons for it having happened.

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