Under all circumstances,unfavorable variances are bad; favorable variances are good.

Question

Quizplus · Accepted Answer

Unfavorable variances indicate costs are higher or revenues are lower than expected, which might be seen as bad. However, they can also signal investments in quality or market share. Favorable variances mean costs are lower or revenues are higher than planned, which seems good, but could also indicate underinvestment or quality issues. The context and reasons behind the variances are crucial for proper interpretation.

Under All Circumstances,unfavorable Variances Are Bad; Favorable Variances Are Good