DQs

1.      Why is the identification of favorable and unfavorable variances so important to a company? How can the identification of the variances help management control costs. Please explain.

2.    Let's first talk about what a Static Budget is.    In short, think of this being 'set in stone.'    Any associated variances can be calculated as follows:
STATIC BUDGET VARIANCE        Compares Actual items (Revenues/Expenses) to Budget made at beginning of period -A Static Budget is based on the level of output planned at the start of the budget period 
 Is this a good measure to use?