Which of the following would cause a variance to be unfavorable?
A)The actual price is less than the standard price.
B)The standard hours allowed are less than the actual hours worked.
C)The overhead costs incurred are less than the flexible budget amount.
D)All of these answer choices are correct.

Question

Quizplus · Accepted Answer

An unfavorable variance occurs when actual costs or revenues exceed the standard or budgeted amount. Option A describes a favorable variance, as a lower actual price than standard price means lower costs. Option C describes a favorable variance, as lower overhead costs incurred mean lower expenses. Option B, where actual hours worked are greater than the standard hours allowed, would result in higher labor costs and therefore an unfavorable variance.

Which of the Following Would Cause a Variance to Be