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Budgeting & planning
Budget versus actual
The monthly comparison of what was planned to what happened, line by line, with the variance and the reason.
Owned by: Entry analystTest band: Entry analyst
The formula
Variance = Actual − Budget
In practice
The variance is the start of the conversation, not the end. The number that matters is the driver behind it and whether it changes the forecast.
The kind of thing the test asks
- Revenue was budgeted at $500k and came in at $460k. What is the variance, and which way?