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CIPS L6M5 Exam - Topic 2 Question 22 Discussion

Casper is conducting a Variance Analysis of the company's budget. What is its main purpose?Answer Options:
C) To minimize inefficiencies
A) To identify which departments have overspent
B) To identify where cost savings can be made
D) To analyze whether costs are fixed or variable

CIPS L6M5 Exam - Topic 2 Question 22 Discussion

Actual exam question for CIPS's L6M5 exam
Question #: 22
Topic #: 2
[All L6M5 Questions]

Casper is conducting a Variance Analysis of the company's budget. What is its main purpose?

Answer Options:

Show Suggested Answer Hide Answer
Suggested Answer: C

A Variance Analysis (p.95) compares planned vs. actual budget and identifies inefficiencies to enhance financial performance. Option A focuses only on overspending, B on cost-cutting, and D on categorizing costs rather than improving efficiency. [P.95]


by Markus at Apr 07, 2026, 04:57 AM

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Aretha
4 days ago
I lean towards A, but B is a close second.
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Craig
9 days ago
D is relevant, but not the main focus here.
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Shawnda
14 days ago
C is important, minimizing inefficiencies helps overall.
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Jarod
19 days ago
B makes sense too, finding cost savings is crucial.
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Broderick
25 days ago
Definitely A! Departments need to be accountable.
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Rodrigo
30 days ago
I think it's to identify overspending.
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Rozella
1 month ago
I thought it was more about fixed vs. variable costs?
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Georgiana
1 month ago
C) To minimize inefficiencies is super important too!
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Matthew
2 months ago
Wait, isn't it also about finding cost savings?
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Karl
2 months ago
Totally agree, that's the main goal!
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Mari
2 months ago
A) To identify which departments have overspent.
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Jesus
2 months ago
I thought it was more about fixed vs. variable costs?
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Leandro
2 months ago
C) To minimize inefficiencies is super important too!
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Ruthann
2 months ago
Wait, isn't it also about finding cost savings?
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Emelda
4 months ago
Totally agree, that's the main goal!
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Elroy
4 months ago
A) To identify which departments have overspent.
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Felix
5 months ago
Analyzing fixed vs. variable costs seems relevant, but I don't think that's the main focus of variance analysis.
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Andrew
5 months ago
I feel like minimizing inefficiencies is important too, but I can't recall if that's the primary goal of variance analysis.
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Tijuana
5 months ago
I remember a practice question that emphasized finding cost savings, so I might lean towards option B.
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Vincenza
5 months ago
I think the main purpose is to identify which departments have overspent, but I'm not entirely sure.
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