ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A budget variance is the difference between the budgeted or baseline amount of expense or revenue and the actual amount. The budget variance is favorable when the actual revenue is higher than the budget or when the actual expense is less than the budget.

Detailed explanation-2: -Budget variance equals the difference between the budgeted amount of expense or revenue, and the actual cost. Favourable or positive budget variance occurs when: Actual revenue is higher than the budgeted revenue. Actual expenses are lower than the budgeted expenses.

Detailed explanation-3: -What Is a Budget Variance? A budget variance is a periodic measure used by governments, corporations, or individuals to quantify the difference between budgeted and actual figures for a particular accounting category.

Detailed explanation-4: -What does favorable and unfavorable mean in accounting? 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.