Variance analysis compares actual results with the budget, and often with the latest forecast, for the same period. Favorable and unfavorable differences are calculated by account and department, so management can see where results departed from plan and how much each area contributed to the total change.
The numbers only describe what happened. The useful work is explaining why, whether that is a price change, lower volume, timing, a one-off event, or a planning error. Good practice keeps measured differences separate from explanations, so the record shows both the facts and management's interpretation.