Need for Variance Analysis Assignment Help Need for Variance Analysis in Manufacturing Setting In accounting, variance analysis is the process in which an organization finds-out the total difference between expected and actual results to identify the effectiveness of management strategy. In this context, the need for variance analysis in manufacturing setting is most important for an organization to know the differences between actual setting costs of manufacturing the product and expected results for the benefits of the business. This manufacturing setting identifies the cost of manufacturing product to validate their cost models and for business improvements on the basis of actual data (Maher, Stickney & Weil, 2011).

 

Variance analysis also identifies per product costing on the basis of actual data to design and specifically to meet the needs of manufacturing companies through formulation of competitive price of the product. Moreover, this variance analysis in manufacturing setting helps to analyze performance standards and cost of inputs such as direct materials, direct labor and overhead in manufacturing a specified level of output. If the expected result of production cost increases from actual results then the company can take actions quickly to minimize the product cost to protect the business from financial losses (Collier & Ampomah, 2009). For example, an organization expects that one thousands unit of the product manufacturing cost would be $10,000, but after production, the actual manufacturing costs exceeds more than expected cost. In this concern, organization can analyze all the responsible factors that contributed in increase of production cost and necessary actions to minimize the costs. At the same time, on the basis of past data of manufacturing the product, variance analysis of an organization can set a standard for future benefits to fulfill the demand of products.

 

The variance analysis in manufacturing setting supports an organization in simulation and forecasting to maintain the running cost models effective for business (Berger, 2011). It also maintains product cost models in need for new product development and budget models to hold standard costs and monitor the performance of business. The variance analysis in manufacturing setting motivates the organizational management for multi-level resource planning to generate accurate projections of activity, material and resource requirements and their related costs over the time horizons such as daily, weekly and monthly etc. References Berger, A. (2011). Standard Costing, Variance Analysis and Decision-Making. USA: GRIN Verlag. Collier, P.M.M. & Ampomah, S.A. (2009). CIMA Official Learning System Performance Strategy. USA: Elsevier. Maher, M.W., Stickney, C.P. & Weil, R.L. (2011). Managerial Accounting: An Introduction to Concepts, Methods and Uses. USA: Cengage Learning. Get Variance Analysis Assignment Help with assignmenthelpexperts.com Students who need business Variance Analysis assignment help can touch with our 24X7 live support system or can send e-mail at info@www.assignmenthelpexperts.com