Question: Variance analysis allows managers to compare budgeted and actual performance so that necessary corrective steps can be taken. Frequently, the analysis helps managers identify operational

Variance analysis allows managers to compare budgeted and actual performance so that necessary corrective steps can be taken. Frequently, the analysis helps managers identify operational inefficiencies and other areas that can be improved. Nonetheless, variance analysis does have several potential drawbacks.

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Describe the various drawbacks of variance analysis.

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