Operations Management: Assessing performance metrics like production volume, labor efficiency, material usage, etc., against expectations.Financial Analysis: Examining variances between actual and budgeted financial figures such as revenue, expenses, and income.For example, if you budget for your department to spend $100,000 a month, and the actual monthly spending is consistently $110,000, a variance analysis sets out to answer the question of why there is a difference of $10,000 between planned and actual spending. This analysis is used to maintain control over a business. Variance analysis is the quantitative investigation of the difference between actual and planned behavior.
