October 2016 (Revised March 2022)
Background Note
HBS Case Collection

Cost Variance Analysis

By: Robert S. Kaplan and Susanna Gallani

Format:Print
| Language:English
| Pages:12

Abstract

This note was written to provide students with fundamental concepts and methods for the analysis of cost variances. It focuses on the decomposition of cost variances into price, quantity, and mix variance components, an approach that allows students to identify the root causes of differences between expected and actual costs.

Keywords

Cost Accounting

Citation

Kaplan, Robert S., and Susanna Gallani. "Cost Variance Analysis." Harvard Business School Background Note 117-006, October 2016. (Revised March 2022.)