Define: Analysis Of Variance

UK Accounting Glossary

Definition: Analysis Of Variance


Quick Summary of Analysis Of Variance


In standard costing and budgetary control this refers to the analysis of variances in order to determine their causes. The total profit variance or production cost variance is analysed into sub-variances to indicate the major reasons for differences between budgeted figures and actual outcomes.




What is the dictionary definition of Analysis Of Variance?

Dictionary Definition


ANOVA – Acronym for analysis of variance.

In standard costing and budgetary control this refers to the analysis of variances in order to determine their causes.


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Full Definition of Analysis Of Variance


The total profit variance or production cost variance is analysed into sub-variances to indicate the major reasons for differences between budgeted figures and actual outcomes.

The main sub-variances include:

  • direct labour efficiency variance
  • direct labour rate of pay variance
  • direct labour total cost variance
  • direct materials price variance
  • direct materials total cost variance
  • direct materials usage variance
  • fixed overhead total variance
  • overhead efficiency variance
  • overhead expediture variance
  • overhead total variance
  • sales margin price variance
  • sales margin volume variance
  • variable overhead total variance

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Analysis Of Variance FAQ's



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This glossary post was last updated: 18th March 2019.