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More in Variance Analysis
What is the total cost variance and how does it relate to the sub-variances? What is a standard costing system? What does an adverse sales price variance indicate? What is a favorable variance a warning sign of sometimes? What are the two components of the direct materials variance? What are the two components of the direct labor variance? How is the variable overhead variance analyzed? What are the sales variances (price and volume)? How do variances reconcile budgeted profit to actual profit (an operating statement)? How do you decide which variances to investigate?
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Budgeting & Forecasting › Variance Analysis

What is the difference between a budget and a standard?

Beginner

Answer

A standard is a per-unit predetermined cost or performance level; a budget is the total plan for a period. Standards are the building blocks—multiplying a standard by planned volume helps build the budget. Variance analysis compares actuals to standards (per unit) and to the flexed budget (in total).
Real-world example The standard cost per unit times budgeted units builds the total materials budget.

Common follow-ups: How do standards build budgets? | Which is per-unit?

Types of Budgets The Budgeting Process Variance Analysis
All 38 Variance Analysis questions