Question

It posible for a retail store such as Apple to use variences. What is the controllable variance and what causes it?

Answer 1

The controllable variance is the difference between rhe actual expenses occurred and the expenses budget allowed. It can be both favourable or unfavourable. Favourable controllable variance is when actual expenses are less than budget expenses allowance and unfavourable controllable variance is when the actual expenses are more than budget expense allowance.

The controllable variance includes variable spending, variable efficiency, and fixed spending variances. The reason for occurance for variances in spending is management offers different price rather than standard price. Variance in efficiency when the price of the input is different than the listed in budget. The fixed spending variance occurs when there is difference between actual overhead expenses and budget overhead expenses.

A Thumbs Up! Would be really helpful for me. If you have any questions, please leave a comment and I will get back to you as soon as possible.