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. A budget variance occurs when we anticipate that an expense/revenue will be one amount, but then the actual happens and comes in at another amount. The difference is a variance and it can be favorable or unfavorable.

Think about a book, TV show, movie, sports event, etc. What did you anticipate would happen? What actually happened? Was the difference favorable or unfavorable, why?

As my example, consider Jack and Jill who went to go get a pail of water. The anticipation is that they will come back with the water. But instead, Jack falls and cracks his skull and then Jill falls too. I see this as an unfavorable variance for water acquisition, since no water was delivered, and an unfavorable variance for medical expense since Jack needed surgery on his head, and then maybe an unfavorable variance on cleaning expense since Jill tumbling down the hill probably made her clothes pretty dirty.

Let's come up with three variances from the example you chose. For your responses to other student posts, either suggest another variance example, or discuss the current variance example. So may be you think that it was dangerous to go up the hill in the first place so we should have budgeted for medical expense from the start. Or, perhaps you think there will be a favorable variance for insurance revenue from a lawsuit since the hill was definitely not safe and proper warning signals should have been posted.

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