What is 'favorable variance' in SAP EPM-BPC - Business Planning and Consolidation?

favorable variance - Overview

• Component: EPM-BPC

• Component Name: Business Planning and Consolidation

• Description: KPI definitions that determine the favorable variance for a KPI.

favorable variance - Details

• 
  Key Concepts: 
  Favorable variance is a term used in the SAP Business Planning and Consolidation (EPM-BPC) module to describe the difference between the actual and budgeted amounts of a particular item. A favorable variance occurs when the actual amount is higher than the budgeted amount. This can be seen as a positive outcome, as it indicates that the company has exceeded its budgeted goals. 
  
  How to use it: 
  In order to calculate favorable variance, you must first enter the budgeted and actual amounts for a particular item into the EPM-BPC module. Once these amounts have been entered, you can then calculate the variance by subtracting the budgeted amount from the actual amount. If the result is positive, then this indicates a favorable variance. 
  
  Tips & Tricks: 
  When calculating favorable variance, it is important to remember that this term only applies when the actual amount is higher than the budgeted amount. If the actual amount is lower than the budgeted amount, then this would be considered an unfavorable variance. 
  
  Related Information: 
  Favorable variance can be used to measure a company’s performance against its budgeted goals. It can also be used to identify areas where a company has exceeded its expectations and can be used to inform future budgeting decisions. Additionally, favorable variance can be used to compare performance across different departments or divisions within a company.