It is not necessary to track all of the preceding variances. In many organizations, it may be sufficient to review just one or two variances. For example, a services organization (such as a consulting BUSINESS) might be solely CONCERNED with the labor EFFICIENCY variance, while a MANUFACTURING business in a highly competitive market might be mostly concerned with the purchase PRICE variance. In other words, put most of the variance analysis effort into those variances that make the most difference to the company if the underlying issues can be rectified.

It is not necessary to track all of the preceding variances. In many organizations, it may be sufficient to review just one or two variances. For example, a services organization (such as a consulting business) might be solely concerned with the labor efficiency variance, while a manufacturing business in a highly competitive market might be mostly concerned with the purchase price variance. In other words, put most of the variance analysis effort into those variances that make the most difference to the company if the underlying issues can be rectified.