ECONOMICS

Detailed explanation-1: -Unfavorable variance is an accounting term that describes instances where actual costs are greater than the standard or projected costs. An unfavorable variance can alert management that the company’s profit will be less than expected.

Detailed explanation-2: -If actual costs are greater than standard costs the variance is unfavorable. An unfavorable variance tells management that if everything else stays constant the company’s actual profit will be less than planned.

Detailed explanation-3: -Variance is the difference between the actual and standard costs. If the actual cost is higher than the standard cost, the variance is unfavorable.

Detailed explanation-4: -A favorable variance occurs when the cost to produce something is less than the budgeted cost. It means a business is making more profit than originally anticipated. Favorable variances could be the result of increased efficiencies in manufacturing, cheaper material costs, or increased sales.

Detailed explanation-5: -When revenue is higher than the budget or the actual expenses are less than the budget, this is considered a favorable variance. Unfavorable variances refer to instances when costs are higher than your budget estimated they would be.