When calculating %var, what formula is used?

When calculating %var, it is ideal to use the formula 1 - fixed%. This formula effectively provides the percentage variance, indicating how much of the total is attributed to variables as opposed to fixed components.

By subtracting the fixed percentage from 1, you isolate the variability component, which is essential in scenarios where understanding the proportion of variable costs versus fixed costs is critical for financial analysis or decisions. This calculation is particularly useful in budgeting, forecasting, and cost management, helping stakeholders assess the dynamics of costs in relation to their fixed counterpart.

This methodology aligns with many accounting and financial principles, where understanding the breakdown of costs into fixed and varying elements helps organizations make informed strategic choices.