Imperatives of Variance Analysis for Cost Control in Business Organizations : An Empirical Study of Delta State

Abstract

This study was carried out to investigate the imperatives of variance analysis for cost control in business organizations: An empirical study of selected firms in Delta State, Nigeria; A set of structured questionnaire was used as the instrument for data collection and administered on 60 respondents of the firms under study randomly using Yaro Yamene formula. Applying this formula, the sample size from a population of 70 is 60 respondents a~ 95% confidence level. Data analysis was made and the hypotheses formulated were tested using Kruskal Wallis one-way analysis of variance by rank. The findings revealed that positive and significant relationship exists between variance analysis in providing directions to the causes of non-performance as against standard performance and enhances management improvement in operations. It was concluded that variance analysis is necessary for organizational performance and growth. The study, however recommended among others, variances based upon scientifically established standards, existence of objective criteria for measuring inputs and outputs and standards should be set and variances analyzed for each responsibility centre for sound variance analysis.