An example of a favorable variance is ________.
A) actual revenues are less than expected revenues
B) actual expenses are less than expected expenses
C) actual material prices are greater than expected material prices
D) expected labor costs are less than actual labor costs

Question

Quizplus · Accepted Answer

A favorable variance occurs when the actual result exceeds the expected result, which means that actual revenues are greater than expected revenues or actual expenses are less than expected expenses. Option B is the only choice that represents a favorable variance where actual expenses are less than expected expenses. The other options represent unfavorable variances.

An Example of a Favorable Variance Is ________