ECONOMICS

Detailed explanation-1: -A technique whereby management focuses its attention on areas in which actual costs are significantly different from standard costs and pays less attention to the cost situations in which performance is satisfactory is known as management by expectation.

Detailed explanation-2: -Standard costing variance analysis is a technique businesses use to keep track of their costs. It involves setting a “standard” cost for each item or activity and comparing actual costs to these standards, and then monitoring performance against that benchmark.

Detailed explanation-3: -Definition: Variance analysis is the study of deviations of actual behaviour versus forecasted or planned behaviour in budgeting or management accounting. This is essentially concerned with how the difference of actual and planned behaviours indicates how business performance is being impacted.

Detailed explanation-4: -Standard costing is a technique where the firm compares the costs that were incurred for the production of the goods and the costs that should have been incurred for the same. Essentially it is the comparison between actual costs and standard costs. The differences between the two are variances.

Detailed explanation-5: -Variance is the difference between the actual and standard costs. If the actual cost is higher than the standard cost, the variance is unfavorable.