Time variance definition — AccountingTools (2024)

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What is the meaning of time variance in accounting? ›

What is a Time Variance? A time variance is the difference between the standard hours and actual hours assigned to a job. The concept is used in standard costing to identify inefficiencies in a production process.

In project management and scheduling, “time variance” refers to the difference between the planned (or estimated) duration for a task or project and the actual duration it takes to complete that task or project. It's a measure used to determine how closely a project is adhering to its original schedule.

When preparing a budget you have to decide when the activity will take place. If it happens at a different time from planned you will get a temporary variance which will generally resolve itself without action on your part. This type of variance is known as a timing variance.

A variance in accounting is the difference between actual and budgeted, or standard, amounts. Variances are computed to identify and analyze the reasons for differences between expected and actual results. This information can be used to improve decision-making and control costs.

The variation in a project's actual schedule, as compared to its planned schedule, is measured by its schedule variance (SV), which measures the difference between the earned value (EV) (the value of work actually performed) and the planned value (PV), so SV = EV – PV.

The simple definition of the term “variance” is the spread between numbers in a data set. Variance is a statistical measurement used to determine how far each number is from the mean and from every other number in the set. You can calculate the variance by taking the difference between each point and the mean.

A time-variant system is a system whose output response depends on moment of observation as well as moment of input signal application. In other words, a time delay or time advance of input not only shifts the output signal in time but also changes other parameters and behavior.

→ check for variance: If any coefficient if input is function of time (t) then it will be time variant.

The term variance refers to a statistical measurement of the spread between numbers in a data set. More specifically, variance measures how far each number in the set is from the mean (average), and thus from every other number in the set. Variance is often depicted by this symbol: σ².

There are three primary causes of budget variance: errors, changing business conditions, and unmet expectations. Errors by the creators of the budget can occur when the budget is being compiled.

What is ideal time variance? ›

Definition of Labor Idle Time Variance

The difference between the number of hours budgeted for work and the number of paid hours not spent working (idle time).

1. : the fact, quality, or state of being variable or variant : difference, variation. yearly variance in crops. 2. : the fact or state of being in disagreement : dissension, dispute.

All standard cost variances are calculated using the actual production quantity as the cost driver. The goal is to determine how much should have been incurred to produce the actual quantity of units produced and compare that to how much was actually incurred to produce the actual quantity of units produced.

Schedule variance is an indicator of whether a project schedule is ahead or behind. It is typically used within earned value management (EVM) to provide a progress update for project managers at the point of analysis.

Introduction. In accounting, a variance is a difference between a budgeted, planned, or standard cost and the actual amounts on the financial statements. While there are multiple types of variances, the most common variances include prior year to current year balances or budgeted to actual amounts.

The variance defines a measure of the spread or dispersion within a set of data. There are two types: the population variance, usually denoted by σ2 and the sample variance is usually denoted by s2 .