variances

Variances are deviations from the norm that may provide warning signs of situations requiring corrective action by managers

Variances are deviations from the norm that may warn of situations requiring corrective action by managers.

- Used in product/service costing, budgeting, and variance analysis.
- Used to support pricing decisions and profitability analysis by cost behavior and drivers.

- Example: The costing team uses **variances** to allocate costs and analyze margins by product line.

- Why it matters: Improves cost accuracy, supports better pricing and budgeting, and strengthens performance measurement.