*If we know that a variance is the result of an uncontrollable price increase for a supply item that we must have, do we need to investigate and make a report regarding the variance? Why or why not?*

I’m not sure if this question is fully packed. What matters
in looking at the variance is not just that a variance occurred, but also the
size of the variance. We can look at a variance as just an absolute dollar
amount or as a percentage of budget. If he variance of the line item surpasses
either of those thresholds in terms of the company’s policy , then I would say
of course a variance report should be prepared. This variance report would be
able to unpack the other issue with the question. It says we know that a
variance is the result in the price increase – but do we know that this is the
sole driver of the variance, or do we know that the price went up so we spent
more? A variance analysis can find other underlying trends that just knowing
that there is a correlation between the variance and the price of the supplies.
This can let us look at perhaps other vendors of the needed item or perhaps a renegotiation
of the terms with our current supplier.