Let’s say that you are themanager of a restaurant chain (choose your favorite,Ap

Question

Let’s say that you are themanager of a restaurant chain (choose your favorite,Applebee’s, Outback, McDonalds, you name it). Yourregional director comes to you showing the following variances foryour store. He wants you to explain these variances. What are some possible explanations for eachvariance?

(Hint: There is no one rightor wrong answer. There are many possibilities. This isjust about brainstorming and understanding what the differentvariances indicate.)

Variance 1:   Your storeis showing a favorable variable overhead efficiency variance of$800 for the month.

Explanation / Answer

Hey Busy Bee Efficiency variance is the difference between thevariable overheads that should have been incurred as per standards& the overheads that have been absorbed into cost . A favourable variance indicates that the businesshas used it's resources effeciently .

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