Reference no: EM133036205

Problem:

A variance happens when the number in the budget for a certain item differs from the actual number for a specific period of time. For example, consider the following scenario:

You have hired a contractor to remodel your kitchen, and you have a budget of $12,000. The contractor has given you an estimate of $10,000 to complete the work. As the project progresses, however, the dollar amount continues to rise due to increasing materials costs, and, in the end, you are charged $15,000.

In this case, you know that the variances were due to the increased materials costs required in order to complete the project as agreed. Sometimes, however, when you encounter a variance, whether favorable or unfavorable, you may not initially know the reason for the difference. As part of your decision making, you will need to do some analysis to determine the cause(s) for any variances you encounter so that you can account for them in future projects. With these thoughts in mind, please answer the following:

PROVIDE  A STORY OF THE EVENT WEHREIN YOU ENCOUNTERED A VARIANCE.

• Describe a time when you encountered a variance between what was planned and the end result, whether in your personal or professional life. Note: This variance could be in your favor (the cost was less than expected) or not favorable.
• Analyze what you believe to be the factors that led to the variance.
• Synthesize an approach that you could take (e.g., a plan or a set of steps) that could help you or your organization avoid those cost variances moving forward.