Budget Variance Calculator

Formula

To calculate the Budget Variance (BV% and AB):

\[ BV\% = \left( \frac{A - F}{A} \right) \times 100 \]

\[ AB = A - F \]

Where:

\(BV\%\) is the Budget Percentage Variance
\(AB\) is the Absolute Variance
\(A\) is the Actual Budget Cost or Actual Outcome
\(F\) is the Forecasted Budget

What is Budget Variance?

A budget variance is defined as either the percentage or absolute difference between a forecasted budget and the actual cost or budget that occurred. Most often it makes sense to look at this in terms of a percentage. Then companies can analyze and compare the variance to other budgets.

Example Calculation

Let's assume the following values:

Actual Budget (\(A\)) = 12000 currency units
Forecasted Budget (\(F\)) = 10000 currency units

Using the formula:

\[ BV\% = \left( \frac{12000 - 10000}{12000} \right) \times 100 = \left( \frac{2000}{12000} \right) \times 100 = 16.67\% \]

\[ AB = 12000 - 10000 = 2000 \text{ currency units} \]

The Budget Percentage Variance is 16.67% and the Absolute Variance is 2000 currency units.