Page 44 - IMDR MSME BOOK 2021

Managing Finance in Micro, Small & Medium Enterprises
It is evident from the analysis that majority (39%) of the
respondents found labour variance to be very important ,
majority (37%) of the respondents found overhead
variance analysis to be important and majority (57%) of
the respondents found the sales variance to be very
important .The statistical analysis for labour variance ,
overhead variance and sales variance validates the
importance of these variance analysis for the efcient
cost management and increasing the productivity of the
factors of production .The sales variance plays very
important role in managing sales and achieving sales
targets .
It is evident from the analysis that the majority of the
respondents found analysis of labour, Overhead and
sales variance to be important and material variance
analysis to be very important. It reveals that the
respondent rms are ensuring the cost controlling and
effective use of factor of production with the help of
variance analysis. The sales variance helps to analyse
the performance of sales department and to set sales
target to achieve the standards. It helps to gure out
remedial actions to be taken by the rms in case of
unfavourable variance.
Costs Management

The superior nancial decisions come from an effective
cost management strategy which aims to maximize value
and minimize both initial and business operational
costs. It includes decisions such as whether to lease or
buy vehicles, real estate or equipment, outsource certain
operations and add or drop a product line. There are
different cost management strategies which can play a
vital role in helping small-business owners to make these
signicant decisions such as relevant cost strategy,
evaluating opportunity costs, balanced scorecard
strategy etc.