# Budget variance

Source: https://storiara.com/glossary/budget-variance
Last updated: 2026-09-14
Author: Charles Hirschhorn, Storiara

> Budget variance is the difference between the approved budget for an account and its estimated final cost, calculated as budget minus EFC. A negative variance means the account is projected to go over; a positive variance means it's projected to come in under. Production accountants report it by account, category, and in total on the weekly cost report.

## Reading variance by category

A week 4 summary for a $1,500,000 feature:

| Category | Budget | EFC | Variance | % of budget | Change from last week |
|---|---|---|---|---|---|
| Above-the-line | $310,000 | $310,000 | $0 | 0.0% | $0 |
| Production | $820,000 | $851,300 | ($31,300) | -3.8% | ($12,600) |
| Post-production | $190,000 | $184,000 | $6,000 | 3.2% | $0 |
| Other | $70,000 | $72,500 | ($2,500) | -3.6% | ($2,500) |
| Contingency | $110,000 | $110,000 | $0 | 0.0% | $0 |
| **Total** | **$1,500,000** | **$1,527,800** | **($27,800)** | **-1.9%** | **($15,100)** |

Production's variance: $820,000 - $851,300 = -$31,300, or $31,300 / $820,000 = 3.8% over. The total shows $27,800 over even though contingency hasn't been touched. This report carries contingency at its full $110,000 in EFC, so if the producer applies $27,800 of it to production, the total comes back to budget with $82,200 of contingency left. The last column says the production category got worse by $12,600 this week, which is the first question for the [line producer](https://storiara.com/roles/line-producer).

## Explaining it

Every significant variance needs a one-line cause, because a number without a reason can't be acted on:

- 3500 Electric: added night exterior condor and two electricians, approved 3/18.
- 3700 Transportation: fuel prices above budget assumption, 4 weeks.
- 4500 Editorial: assistant editor starts two weeks later than budgeted.

A variance caused by a decision (adding a scene) is managed differently from one caused by a pattern (daily [overtime](https://storiara.com/glossary/overtime) running long), which needs a fix on set.

## Timing variances versus real ones

Some variance is only timing: an invoice arrived earlier than the budget spread assumed. That shows up in the [cash flow schedule](https://storiara.com/glossary/cash-flow-schedule), not in EFC. True variance changes the projected final cost. Mixing the two makes a production look over when it's only early.

## Where it comes from

Variance is only as honest as the [estimate to complete](https://storiara.com/glossary/estimate-to-complete) behind it, and it's measured against the [locked budget](https://storiara.com/glossary/locked-budget). Daily [hot costs](https://storiara.com/glossary/hot-costs) feed the labor side, and open [purchase orders](https://storiara.com/glossary/purchase-order) feed the commitments. The [production accountant](https://storiara.com/roles/production-accountant) prepares it weekly, and [how to read a film cost report](https://storiara.com/blog/how-to-read-a-film-cost-report) covers the whole report.

## Frequently asked questions

### How do you calculate budget variance on a film?

Variance = budget - estimated final cost, where EFC is actual costs to date plus open purchase orders plus estimate to complete. Many reports also show variance as a percentage of budget.

### Is a positive variance good?

On most film cost reports, a positive number (or a number without parentheses) means the account is projected under budget. Check the report's convention, because some software shows overages as positive.

### What's the difference between this week's variance and total variance?

Total variance compares the whole account's projected final cost with its budget. The change in variance from last week shows what moved this week, which is usually what a producer wants to discuss.