Percentage Expense Variance

The Percentage of Actual verses Budgeted Expense Variance formula computes the percent that equates to the variance in the budget realized in the actual amount of expenses.  

INSTRUCTIONS: Choose currency units and enter the following:

• (AE)  Actual Expense.
• (BE) Budgeted Expense.

Percent Expense Variance(PEV): The calculator returns the variance in expense in percent.

The Math / Science

In budgeting (or management accounting in general), a variance is the difference between a budgeted, planned or standard cost and the actual amount incurred/sold. Variances can be computed for both costs and revenues. This equation shows the percentage of variance in relation to expense.  The formula for Percent Expense Variance is:

   PEV = (AE - BE)/BE

where:

• PEV = Percent Expense Variance
• AE = Actual Expense
• BE = Budgeted Expense

For example, if the budget for a specific expense was $100 and the actual expense (ae) was $120, then the percent expense variance would be 20% as follows:

Expense Variance (%) `= (AE-BE)/(BE)  = ($120 - $100)/($100) = 20%`

Resource:

• Dopson, Lea R., and David K. Hayes. Managerial Accounting for the Hospitality Industry. Hoboken, NJ: Wiley, 2009. Print.