What is the difference between favorable variance and unfavorable variance?

In the field of accounting, variance simply refers to the difference between budgeted and actual figures. Higher revenues and lower expenses are referred to as favorable variances. Lower revenues and higher expenses are referred to as unfavorable variances.

What does an unfavorable variance indicate?

Unfavorable variance is an accounting term that describes instances where actual costs are higher than the standard or projected costs. An unfavorable variance can alert management that the company’s profit will be less than expected.

What does a Favourable variance indicate?

A favourable variance is where actual income is more than budget, or actual expenditure is less than budget. This is the same as a surplus where expenditure is less than the available income.

What determines favorable or unfavorable?

If revenues were higher than expected, or expenses were lower, the variance is favorable. If revenues were lower than budgeted or expenses were higher, the variance is unfavorable.

What is the difference between favorable and unfavorable?

Favorable variances are defined as either generating more revenue than expected or incurring fewer costs than expected. Unfavorable variances are the opposite. Less revenue is generated or more costs incurred. Either may be good or bad, as these variances are based on a budgeted amount.

What is the difference between unfavorable cost variance and favorable cost variance?

Favorable and Unfavorable Variances There is an unfavorable variance when the actual cost incurred is greater than the budgeted amount. There is a favorable variance when the actual cost incurred is lower than the budgeted amount.

Is a favorable variance always good?

Obtaining a favorable variance (or, for that matter, an unfavorable variance) does not necessarily mean much, since it is based upon a budgeted or standard amount that may not be an indicator of good performance.

What do you mean by Favourable and Unfavourable?

having desirable or positive qualities especially those suitable for a thing specified. Antonyms: unfavorable, unfavourable. not encouraging or approving or pleasing. negative. expressing or consisting of a negation or refusal or denial.

Is Favourable variance always indicator of efficiency in operations?

In a standard costing system, some favorable variances are not indicators of efficiency in operations.

Is a Favourable variance always a good thing?

Why do we need to investigate favorable and unfavorable variances?

What is the difference between Favourable and Unfavourable balance?

If the exports of a country exceed its imports, the country is said to have a favourable balance of trade, or a trade surplus. Conversely, if the imports exceed exports, an unfavourable balance of trade, or a trade deficit, exists.

What is the difference between Favourable and favorable?

“Favorable” is the American English spelling of this word. they are the same word. it is spelled “favorable” in the USA. it is spelled “favourable” in the UK.

Is a zero variance favorable or unfavorable?

The answer is:neither. If there’s zero variance, it means actual sales came in according to plan. This is good in the sense that the forecast is…

What is the difference between favorable and unfavorable trade?

What is meant by Favourable and Unfavourable?

What is the meaning of favorable results?

1 advantageous, encouraging, or promising. 2 giving consent.

What is meant by unfavorable condition?

adjective. Unfavorable conditions or circumstances cause problems for you and reduce your chances of success. The decision to delay the launch stems from unfavorable weather conditions. The whole international economic situation is very unfavorable for the countries in the south.