What term describes the difference between the budgeted figure and the actual figure?

• A. Value statement
• B. Wages
• C. Variance
• D. Withholding tax

Answer: (C)

The difference between a budgeted figure and the actual figure is called a variance. In budgeting and performance analysis, you compare what you planned to spend or earn with what actually happened to see how much you diverged from the plan. This gap is tracked to determine whether results are favorable or unfavorable: for costs, a higher actual than budget is typically unfavorable, while for revenue, a higher actual than budget is favorable. In hospitality, you’d examine variances in areas like labor costs, food costs, or sales to identify where to adjust staffing, purchasing, or pricing. The other terms aren’t about the gap between planned and actual figures: a value statement is about company values, wages are pay to employees, and withholding tax is a payroll deduction.