Tip: Weight lets you emphasize critical lines when reviewing overall results.
What Does “Actual Variance” Mean?
In budgeting and performance reports, variance is the gap between what actually happened and what you planned (the budget).
Formulas
- Amount variance:
Actual − Budget - Percent variance:
(Actual − Budget) ÷ Budget × 100%
Favorable vs. Unfavorable
- Revenue: positive variance = favorable; negative variance = unfavorable
- Cost/Expense: negative variance = favorable; positive variance = unfavorable
Quick Examples
| Category | Budget | Actual | Amount Variance | Percent Variance | Interpretation |
|---|---|---|---|---|---|
| Revenue | 100,000 | 110,000 | +10,000 | +10% | Favorable |
| Expense | 50,000 | 55,000 | +5,000 | +10% | Unfavorable |
Note: In statistics, “variance” means something different—it measures how spread out data is. In budgeting, use the formulas above.
FAQs
Variance equals actual minus budget. Positive values indicate higher actuals than planned. For expenses that is typically unfavorable while for revenue it is typically favorable.
For expense lines spending less than budget is favorable and more than budget is unfavorable. For revenue lines earning more than budget is favorable and less is unfavorable.
When the budget is zero the percent variance is not defined and is shown as an em dash. The absolute variance still clarifies the difference between actual and budget.
Yes. The tool automatically rolls up lines by category and shows budgets actuals variance percent variance and weighted variance totals for each category.
Weights scale the variance for each line when computing weighted variance totals. Use higher weights for high impact lines to emphasize their effect on overall results.