If actual costs are greater than standard costs there is a(n)
A) normal variance.
B) unfavorable variance.
C) favorable variance.
D) error in the accounting system.

Question

Quizplus · Accepted Answer

An unfavorable variance occurs when actual costs exceed standard costs. This indicates that the company's costs are higher than expected, which is typically seen as a negative outcome. It may suggest inefficiencies or unexpected external factors that drove up costs beyond what was planned for in the standard.

If Actual Costs Are Greater Than Standard Costs There Is