In evaluating cost variances,the accounting department determines whether variances are favorable or unfavorable.

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This is true because a favorable variance refers to a situation where actual costs are less than budgeted costs, resulting in savings for the company. An unfavorable variance, on the other hand, occurs when actual costs are higher than budgeted costs, indicating that the company has spent more than expected. The accounting department must determine whether the variances are favorable or unfavorable to accurately assess the financial performance of the company.

In Evaluating Cost Variances,the Accounting Department Determines Whether Variances Are