# splitting variances into planning and control factors

Registered Posts: 121 Dedicated contributor 🦉
hey everyone! can someone please explain to me what are planning and control factors into which the variances are split?? any help is appreciated

• Registered Posts: 466 Dedicated contributor 🦉
Simple transaction to demonstrate:

Original Budget planned to sell 600 units @ £72
Actual result was to sell 600 units @ £ 86

However due to market conditions it was determined that a realistic selling price should of been £ 82. Split into planning and operational variances: -

Operational Variance
Adjusted Standard : 600 units @ £ 82 = 49,200
Actual : 600 units @ £ 86 = 51,600
Variance = £ 2,400 (F)

Planning Variance
Adjusted Standard : 600 units @ £ 82 = 49,200
Original Standard : 600 units @ £ 72 = 43,200
Variance = £ 6,000 (F)

Basically it shows that out of a total variance £ 8,400 (F) - £ 6,000 was due to the original plan being unaccurate and £ 2,400 was due to other factors.

Hope this is of some use.
• Registered Posts: 121 Dedicated contributor 🦉
thank you crispy

hi .thanks alot for crispy. you have been a great help.thanx again