Identify the situation below that will result in a favorable variance.
A) Actual costs are higher than budgeted costs.
B) Actual income is lower than expected income.
C) Actual revenue is higher than budgeted revenue.
D) Actual expenses are higher than budgeted expenses.
E) Actual revenue is lower than budgeted revenue.

Question

Quizplus · Accepted Answer

A favorable variance occurs when actual revenue or income is higher than budgeted revenue or income. This means that the business has achieved higher than expected profits or sales, leading to a positive impact on the bottom line. Option C is the only situation where actual results are higher than budgeted, indicating a favorable variance.

Identify the Situation Below That Will Result in a Favorable