The difference between the two variances is statistically significant. This condition indicates that your sample provides strong enough evidence to conclude that the variability in the two populations are different.

What is variance and its significance?

The variance is a measure of variability. It is calculated by taking the average of squared deviations from the mean. Variance tells you the degree of spread in your data set. The more spread the data, the larger the variance is in relation to the mean.

Are all variances significant?

When standards are compared to actual performance numbers, the difference is what we call a “variance.” Variances are computed for both the price and quantity of materials, labor, and variable overhead, and are reported to management. However, not all variances are important.