Gauging the Favorableness of Variances When variances occur, they are described as being either favorable or unfavorable. When actual activity consumes more time or money than initially planned, an unfavorable variance exists. However, when actual activity consumes less time or money than initially planned, a favorable variance exists. Note that the terms favorable and unfavorable are used, rather than saying that a variance is good or bad, because until the cause of a variance is discovered, it is not clear whether a variance is either good or bad. Note: Use the minus sign to indicate negative values (when the budgeted amount is greater than the actual). If a company calculates that the actual cost for the actual hours worked by employees was $4,300,000, and the amount budgeted for those hours actually worked was $4,800,000, the actual cost for hours worked less the budgeted cost for hours worked is $fill in the blank 53fc32fccfba079_1. This tells you that the actual cost at actual hours worked is the budgeted cost at actual hours worked. What type of variance is this? If a company calculates that the budgeted cost for actual hours worked is $160,000, and the budgeted cost at the budgeted amount of hours to have been worked is $120,000, the budgeted cost at actual time worked less the budgeted cost at budgeted hours to have been worked is $fill in the blank 53fc32fccfba079_4. This tells you that the actual hours worked at budgeted cost is budgeted hours worked at budgeted cost. What type of variance is this?
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Gauging the Favorableness of Variances
When variances occur, they are described as being either favorable or unfavorable. When actual activity consumes more time or money than initially planned, an unfavorable variance exists. However, when actual activity consumes less time or money than initially planned, a favorable variance exists. Note that the terms favorable and unfavorable are used, rather than saying that a variance is good or bad, because until the cause of a variance is discovered, it is not clear whether a variance is either good or bad.
Note: Use the minus sign to indicate negative values (when the budgeted amount is greater than the actual).
If a company calculates that the actual cost for the actual hours worked by employees was $4,300,000, and the amount budgeted for those hours actually worked was $4,800,000, the actual cost for hours worked less the budgeted cost for hours worked is $fill in the blank 53fc32fccfba079_1. This tells you that the actual cost at actual hours worked is
the budgeted cost at actual hours worked.
What type of variance is this?
If a company calculates that the budgeted cost for actual hours worked is $160,000, and the budgeted cost at the budgeted amount of hours to have been worked is $120,000, the budgeted cost at actual time worked less the budgeted cost at budgeted hours to have been worked is $fill in the blank 53fc32fccfba079_4. This tells you that the actual hours worked at budgeted cost is
budgeted hours worked at budgeted cost.
What type of variance is this?
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