Variance (Estimate vs. Actual)

Definition

The gap between predicted and real cost. Convention here: Actual - Estimate, so positive = over budget.

Formula

Variance ($) = Actual - Estimate
Variance (%) = (Actual - Estimate) / Estimate

Worked Example

Estimate $6,000, actual $7,400:

Variance = +$1,400 = +23.3% over budget

Threshold rule of thumb:
  within +/-10%   normal noise
  +/-10-25%       flag, review at close
  > +/-25%        written explanation + re-baseline

Interpretation & Pitfalls

Variance is a learning instrument, not a blame instrument: systematic overruns mean the estimation process needs fixing.

In TupicFinance

Variance views (Layer 3) compute estimate-vs-actual comparisons live, per task and rolled up per goal.