ECONOMICS

Detailed explanation-1: -A budget variance is the difference between the budgeted or baseline amount of expense or revenue and the actual amount. The budget variance is favorable when the actual revenue is higher than the budget or when the actual expense is less than the budget.

Detailed explanation-2: -Your static budget never changes. It’s a figure that’s determined before the start of the fiscal year and is based on projected income and expenses. By contrast, actual figures reflect your actual budget-income and expenses throughout the year that contribute to revenue and cash flow.

Detailed explanation-3: -budget variance Difference between amount budgeted and actual amount spent or received.

Detailed explanation-4: -First, subtract the budgeted amount from the actual expense. If this expense was over budget, then the result will be positive. Next, divide that number by the original budgeted amount and then multiply the result by 100 to get the percentage over budget.