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: January 9, 2023
10 Reviews (58 ratings)


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.

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

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

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

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

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

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

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

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

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

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 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
  Explaining Financial Results: A Practical Approach to Variance Analysis50:04
  Slides: A Practical Approach to Variance AnalysisPDF
  A Practical Approach to Variance Analysis Glossary/IndexPDF