What is a Budget Variance in construction?

Budget variance in construction is the mathematical difference between estimated project costs established during planning and actual costs incurred during construction, calculated by subtracting budgeted amount from actual expenditure indicating whether project is under budget (positive variance) or over budget (negative variance) for financial tracking and cost control purposes.

Comprehensive Definition and Calculation Method

• Actual costs incurred during construction measured
• Budgeted amount subtracted from actual
• Difference found showing variance amount
• Under or over budget determined by sign

Uses and Financial Management

• Financial tracking monitoring project costs
• Cost control preventing overspending
• Performance measure evaluating estimation accuracy
• Adjustments made to stay within budget

Budget variances are differences between estimated and actual construction costs calculated by subtracting budgeted amount from actual expenditure tracking financial performance.