In budgeting, variance is defined as the difference between actual and budgeted amounts.

• A. Forecast
• B. Deviation
• C. Difference Between Actual And Budgeted Amounts
• D. Allocation

Answer: (C)

Variance in budgeting is the difference between what actually happened and what was planned in the budget. It’s calculated by subtracting the budgeted amount from the actual amount, giving a value that can be positive or negative. This helps management see how far actual results deviate from the plan and to investigate why the gap occurred, so corrective actions can be taken if needed. The option that matches this definition exactly is the Difference Between Actual And Budgeted Amounts. A forecast is simply an estimate of future results, not the gap itself. Deviation is a general term for any departure and isn’t specific to the budgeted comparison, and allocation refers to distributing resources rather than measuring variance.