What is the significance of a budget variance?

A budget variance is significant primarily because it highlights the difference between budgeted and actual performance. This comparison is crucial for understanding how well an organization is adhering to its financial plans. By analyzing the variances, management can pinpoint areas where the company is overspending or where revenue is falling short. This understanding enables managers to make informed decisions regarding resource allocation, operational adjustments, and strategic planning to improve financial performance in the future.

While the other options mention important business concepts—such as tax obligations, market share, and financial forecasts—they do not directly relate to the purpose of a budget variance. The key focus of a budget variance is its role as a performance measurement tool, making option B the most relevant in this context.