Which term describes the variance between budgeted and actual expenses?

• A. Discrepancy
• B. Deviation
• C. Variance
• D. Delta

Answer: (C)

Variance is the difference between budgeted and actual expenses. This concept lets managers quantify how far spending deviates from the plan. It can be favorable or unfavorable: if actual costs exceed the budget, the variance is unfavorable, signaling overspending; if actual costs are lower than budget, the variance is favorable, signaling under-spending. In hospitality, regular variance analysis helps you pinpoint causes like price changes, waste, or volume shifts, so you can take corrective actions. Other terms like discrepancy or deviation are broader and less precise for budgeting comparisons, and delta is a general measure of change rather than the established budgeting term. Therefore, variance is the precise, standard term for this concept.