Unfavorable variances are subtracted from each other to arrive at a favorable variance.

Question

Quizplus · Accepted Answer

Unfavorable variances cannot be subtracted from each other to arrive at a favorable variance. This is because unfavorable variances represent deviations from the expected outcome in a negative direction, while favorable variances represent deviations from the expected outcome in a positive direction. Therefore, unfavorable variances can only be offset by favorable variances, not by other unfavorable variances.

Unfavorable Variances Are Subtracted from Each Other to Arrive at a Favorable