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i am confusing with the difference between the operating variances and planning variances.
Operating variances use new, better standards. The old standards are irrelevant. This will produce variances which should be better indicators of operational performance because more accurate standards are used.
Planning variances arise from the difference between two flexed budgets, one using old standards, the other using new standards. These are less useful.
This is a subject covered in F5. If you need more see our F5 notes, starting on page 57.
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