Companies often use variance analyses to gain greater insight into their financial performance.  Variance analysis is a process that identifies and explains differences in actual results compared to budgeted or past results. Typically thought of as more of a cost accounting tool for manufacturing companies, its usefulness extends to retail and service companies as well. This course examines the variance analysis process, its limitations and benefits, and how to effectively use it to understand and manage a company’s financial results regardless of industry.

Course Key Concepts: Budgeting and Forecasting, Variance Analysis, Favorable and Unfavorable Variances, Management by Exception, Financial Analysis, Financial Statements.

Learning Objectives
  • Discover what variance analyses are and why companies prepare them.
  • Identify the benefits and limitations of variance analysis.
  • Identify the different types of variances.
  • Recognize the connections between variances and business performance.
  • Discover how to effectively use variance analyses to understand a company’s financial statements.
Last updated/reviewed: August 7, 2023
38 Reviews (194 ratings)

Reviews

5
Member's Profile
Very clear! I liked the discussions about the challenges of performing variance analyses and what makes for a meaningful explanation. But I'm not sure why the correct answer for the benefit of doing variance on the exam is correct. Seems like that should be looked at.

4
Anonymous Author
This course was informative and well-presented. The only constructive feedback is that the video of the presenter did cover the material on the slides a bit; may want to re-configure so the audience is able to view the full slide on screen during the presentation.

4
Anonymous Author
Good basic introduction

5
Anonymous Author
this course was helpful in determining the best uses of variance analysis for a company to help them set goals for the future. It also exemplifies the importance of having good reasons behind variance analysis.

5
Anonymous Author
Spells out what a variance analysis is and the cases when it is used (actual to another period of time, actual to budget). Provides an overview of common reasons for variances in the standard accounts.

4
Member's Profile
This was a decent course and good for basic understanding. This would be a good entry level course for someone just getting started in gaining an overall understanding of variance related thinking.

5
Anonymous Author
This course was a great review of Variance Analysis. This is the first time I have had a course with this instructor. She was knowledgable and easy to follow. I will take more courses from her.

4
Member's Profile
This course provides a strong framework for analyzing variance in service, retail and manufacturing entities, Clear explanations, good examples and hands-on exercises throughout.

5
Anonymous Author
I thought this course was very interesting and helpful. I thought the instructor explained the topic very well. I would recommend this course to others.

5
Member's Profile
The course was very informative. It had key points of variances related to sale prices, sale volume, labor costs etc. Very useful for my line of work.

5
Anonymous Author
I really liked Carol's presentation and various examples which made it easy to follow and stay engaged. This was a good summary of variance analysis.

5
Member's Profile
This course was very informative, and exam/quizzes were fair. I have a much better understanding of this material than before taking this course.

5
Anonymous Author
Instructor had great but simple examples for us to follow. Explained things in a way most anyone even a non financial person could understand

4
Member's Profile
Decent for 1 hour, would have liked more in depth on how to execute variance explanations more effectively throughout the organization.

5
Anonymous Author
A lot of information packed into this presentation gives a variety of real life examples on what variance explanations will look like.

5
Anonymous Author
This is a good introductory course to variance analysis. It helps in explaining the basics before moving on to a more in-depth course.

5
Anonymous Author
Very good refresher for variances. Easy to understand and follow. Good examples. hope this instructor has more classes to offer.

5
Anonymous Author
This course was beneficial to those who are seeking a comprehensive overview of variance analysis and budget to actual procedures.

5
Anonymous Author
Carol is a fantastic job laying out the information and provided great real world examples for applying variance analysis.

5
Anonymous Author
I enjoyed the class very much. Very informative as well as helpful. I would recommend to anyone interested in finance.

4
Anonymous Author
The information provided was useful and insightful, and provides a good basis of understanding of variance analysis.

5
Anonymous Author
Great introduction to variance explanations. I like the materials and examples presented in the course. No Dislikes

5
Anonymous Author
Great course! The presentation was exceptional and the instructor provided an explanation in such a great manor.

5
Member's Profile
Interesting topic and worth learning about. Recommend it to people who haven't studied this before.

3
Anonymous Author
After years of being away from cost accounting this course served as a good refresher of basic terms

5
Anonymous Author
This course was a helpful intro to variance analysis. Covering different industries was beneficial.

5
Anonymous Author
This course is a very good refresher for those that perform variance analysis on a monthly basis.

4
Anonymous Author
Good overview of the importance and best practices for approaching performing a variance analysis

5
Anonymous Author
Highlights the importance of why we analyze and review variances to the plan and past history.

5
Anonymous Author
comparison between service company and manufacturing per vasiance type is good to understand

3
Member's Profile
Course was good. I wished it would have elaborated more on the types of variances.

3
Member's Profile
using the term widgets as your sample product line is quite archaic.

4
Anonymous Author
good course for individuals looking to get into financial analysis

4
Anonymous Author
course provides a basic overview of budget variance analysis

4
Anonymous Author
Presenter was thorough and course material was appropriate.

5
Anonymous Author
This was a helpful review of variance analysis. Thank you.

5
Member's Profile
Great instructor, seemed very personable and welcoming.

4
Anonymous Author
Clean, concise, and to the point. Great presentation.

Prerequisites
Course Complexity: Intermediate

No advanced preparation or prerequisites are required for this course.

Education Provider Information
Company: Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact: For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Instructor for this course
Course Syllabus
INTRODUCTION AND OVERVIEW
  Introduction to Explaining Financial Results: A Practical Approach to Variance Analysis1:35
  Variance Analysis: What is it and Why is It Done?7:06
  Benefits and Limitations9:28
  Types of Variances: Service Companies6:27
  Types of Variances: Retail Companies7:56
  Types of Variances: Manufacturing Companies6:17
  Types of Variances: All Companies3:26
  Variance Explainations7:01
  Conclusion 0:48
CONTINUOUS PLAY
  Explaining Financial Results: A Practical Approach to Variance Analysis50:04
SUPPORTING MATERIALS
  Slides: A Practical Approach to Variance AnalysisPDF
  A Practical Approach to Variance Analysis Glossary/IndexPDF
REVIEW AND TEST
  REVIEW QUESTIONSquiz
 FINAL EXAMexam