ECONOMICS

Detailed explanation-1: -Explanation: The real cost of material cost, direct labor, and administration to produce a unit of product is known as actual cost. 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-2: -A standard cost variance is the difference between a standard cost and an actual cost. This variance is used to monitor the costs incurred by a business, with management taking action when a material negative variance is incurred. The standard from which the variance is calculated may be derived in several ways.

Detailed explanation-3: -The difference between the actual cost and the standard cost is known as variance. The variance can either be favorable or unfavorable. Favorable variance means the actual cost is lower than the standard cost, while unfavorable variance means the actual cost is higher than standard cost.

Detailed explanation-4: -When standards are compared to actual performance numbers, the difference is what we call a “variance.” Variances are computed for both the price and quantity of materials, labor, and variable overhead and are reported to management. However, not all variances are important.

Detailed explanation-5: -The difference between the standard and actual costs is known as a variance. The variance indicates a deviation from what was recorded in the profit plan. If actual costs are more significant than standard, management can likely anticipate a lower profit.