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Variance analysis
Spend and rate variances
For a cost line, splitting the variance into how much came from paying a different rate (price per unit, salary per head) and how much from using a different quantity (hours, heads, units).
Owned by: AnalystTest band: Analyst
In practice
Headcount over budget by two people is a volume variance; the same cost from higher salaries is a rate variance. Different problems, different owners.
The kind of thing the test asks
- Salaries are $60k over budget. Headcount matches the plan exactly. The variance is a…
More in variance analysis
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