If actual revenue exceeds planned revenue, then:
A) The difference is said to be a favorable variance.
B) The difference is said to be an unfavorable variance.
C) The difference must be decomposed into price and quantity components before it can be judged to be favorable or unfavorable.
D) Gap analysis would be preferred to variance analysis in assessing performance.

Question

Quizplus · Accepted Answer

When actual revenue exceeds planned revenue, the difference is considered a favorable variance because it indicates that the company performed better than expected in terms of revenue generation.

If Actual Revenue Exceeds Planned Revenue, Then