ECONOMICS

Detailed explanation-1: -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: -When the actual cost differs from the standard cost, it is called variance. If the actual cost is less than the standard cost or the actual profit is higher than the standard profit, it is called favorable variance.

Detailed explanation-3: -Manufacturers, of course, still have to pay the actual costs. As a result there are almost always differences between the actual costs and the standard costs, and those differences are known as variances. Standard costing and the related variances is a valuable management tool.

Detailed explanation-4: -The difference between the standard cost of a product and its actual cost is called a cost variance. A favorable cost variance occurs when the actual cost is less than the standard cost. An unfavorable cost variance occurs when the standard cost exceeds the actual cost.

Detailed explanation-5: -Cost variance is the process of evaluating the financial performance of your project. Cost variance compares your budget that was set before the project started and what was spent. This is calculated by finding the difference between BCWP (Budgeted Cost of Work Performed) and ACWP (Actual Cost of Work Performed).