costs variance analysis

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In 100 words or more reply to the statement below about costs variance analysis

Cost Variance is a control system that is designed for detection and correction variances from expected levels, cost variance is compromised of the following steps 1. Calculate differences between the incurred cost and expected cost, give reasons for the investigated difference, make sure you report information to management, make sure corrective action is bought with incurred cost into closer alignment with expected cost. The simple form of cost variance analysis is subtracting budgeted or standard cost from actual incurred cost and giving a report of the difference. twp split this approach in two is Price Variance- a portion that is caused by a difference of actual and expected price of goods or services/ Volume Variance- The portion that causes any change in the volume of goods or services ordered. (accountingtools) UoPedatabase ch 24Reference:UoPedatabse Ch24

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