Assignment: Using Variance Analysis in Decision MakingHaving a budget is critical for thefinancial stability of an organization. Keeping track of how well theorganization is actually adhering to the budget, and subsequent identificationof why the budget numbers are being missed is equally important. Without thiscritical “why” piece, it is difficult to make the necessary adjustments to thebudget or to organizational behavior that might be promoting overspending.A good budget is built with thoughtfulconsideration of future costs and revenue. Though your budget is formulatedwith expected figures in mind, the actual resulting values may varyconsiderably. This variance–from projected to actual–can be a pleasant surpriseor a fiscal nightmare and can make financial decision making difficult.Fortunately, variance analysis can enable management to determine why varianceoccurred and what can be done to mitigate its effects.For those not comfortable with theuse of Microsoft Excel, this week’s Optional Resources suggest severaltutorials.To prepare:Review the information in this week’s LearningResources dealing with variance analysis, how it is calculated, and how itcan be used in decision making.View the video Week 8 Application AssignmentTutorial: Variance Analysis, provided in this week’s Learning Resources.Use the Week 8 Application Assignment Template, provided in this week’s Learning Resources, tocomplete this assignment. Carefully examine the information in eachof the scenarios and provide the necessary calculations. Using thisinformation will help you answer the questions. ByDay 7Note: For those Assignments in this course that require you toperform calculations you must:·Use the Excel spreadsheet template for the Week 8 assignment·Show all your calculations and formulas in the spreadsheet.·Answer any questions included with the problems (as text inthe Excel spreadsheet).A title and reference page are NOTneeded in this assignment. Put your name and assignment at the top of the Excelspreadsheet.Use the Week 8 Application Assignment Template for the Week 8 assignmentSalaryVariance ScenarioFor this Assignment run a variance analysis. Based on the information youobtain: assess the results of the analysis, suggest potential causes of thebudget variances and an explanation for addressing the situation.Using the following performance datacalculate the volume adjusted laborrate variance and volume adjusted efficiency variance. Your Variable ExpenseFactor is 40% and your Volume Change Factor is 50%.Note: Submit the Excel spreadsheet containing your SalaryVariance Scenario calculations to the Assignment submission link.