Variances represent the difference between actual results and the expected results of an activity or measure. Expected results are often referred to as budgets. One of the key methods that cost accountants use to measure performance is the variance of actual performance against that of the budget for the period.
Describe an example of an activity that you would use variance analysis as a means to measure its performance over time. Include in your description which risks the use of variance analysis would pose to ensuring the example stays on track.