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Discuss the purpose of a budget and cost variance analysis. Why is it important for companies...

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Accounting

Discuss the purpose of a budget and cost variance analysis. Whyis it important for companies to create a budget then determine ifthey met budgeted costs? For example, is it always a negativevariance if a company exceeds budgets? Give me an example of why acost falling below expectations (actual cost below budgeted cost)may still be a problem even if it appears to increase profit.

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Purpose of a budget and cost variance analysis The purpose of budgeting is basically to provide a model of how the business might perform financially speaking if certain strategies events plans are carried out In constructing a Business Plan the manager attempts to forecast Income and Expenditure and thereby    See Answer
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