Question: How does variance analysis help in continuous improvement? A . The underlying causes of unfavorable variances are identified, and corrective action is taken where possible.

How does variance analysis help in continuous

improvement?

.

The underlying causes of unfavorable variances are

identified, and corrective action is taken where possible.

.

Variance analysis can help in continouous improvement by using unfavorable variances to place blames on certain managers. This creates the incentives to find creative ways for improvement. Having facvorable variances results in a more efficient and profitable company.

.

Favorable variances are the areas that do not need further investigation.

.

A and B

.

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