As you have learned through reading these chapters, a variance is the difference between budgeted and actual results within a specific area of the organization. The reason we study this topic is to assess performance and subsequently react to the variance information we have received. Analyze the use of variance analysis as a basis for performance evaluations within an organization. You may choose any government, not-for-profit, or profit entity.

Discuss variance analysis with your peers. Do you think variance analysis helps or hinders performance evaluations within the organization? Should it be used as the only measure to evaluate performance?