Chapter 21, Problem 6QS

To determine

Cost Variances:

The cost variances depict the deviations from the projected standard price and quantity from the actual ones. It helps in the preparation several management reports so to analyze the performance of the firm with respect to the budgeted funds and the deviations could be fixed for the smooth functioning of activities of the business.
Favorable cost variances are when the costs actually incurred are less than the anticipated costs.
Unfavorable cost variances are the ones where the actual costs incurred are higher than the anticipated costs.

Cost variance and classify as favorable or unfavorable.