What control technique assesses differences between budgeted and actual revenues and expenses?

Variance Analysis is the control technique specifically designed to evaluate the differences between budgeted and actual revenues and expenses. This method involves comparing what was planned in the budget to what actually occurred, thus allowing organizations to identify variances—areas where financial performance did not meet expectations.

By performing variance analysis, management can gain insights into how well the organization is adhering to its financial goals. It helps in understanding the reasons behind these variances, whether they are favorable (actual revenues exceed budgeted or actual expenses are lower than budgeted) or unfavorable (actual revenues fall short of budgeted or actual expenses are higher than budgeted). This analysis is essential for informed decision-making, enabling businesses to take corrective actions and adjust future budgets accordingly.

Other techniques mentioned do serve important purposes but do not specifically focus on the assessment of budgeted versus actual financial performance. Cost-Benefit Analysis focuses on weighing the benefits against the costs of a decision, Trend Analysis examines patterns over time without contextual cost comparisons, and Performance Monitoring generally refers to tracking various metrics without the specific financial budgeting context.