What are the pre-requisites for reporting the variances effectively?

What are the pre-requisites for reporting the variances effectively?

The pre-requisites for reporting the variances effectively are as follows:

- Structure of the Organisation should be clearly defined.

- Cost centre should be clearly defined.

- Reports showing the variance should be simple and clear to understand.

- The computation and analysis of the variance should be accurate.

- Efforts should be made in order to differentiate between controllable variance and non controllable variance.

- The reports should contain a comparison of variance with the planned results.

- The format and contents of the reports should be according the level of management to whom reports are being presented.
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