When would a variance be labeled as favorable?
A) When actual costs are less than standard costs
B) When standard costs are equal to actual costs
C) When standard costs are less than actual costs
D) When estimated costs are greater than actual costs

Question

Quizplus · Accepted Answer

A variance would be labeled as favorable when actual costs are less than standard costs. This means that the actual costs were lower than expected, which can result in cost savings and increased profitability.

When Would a Variance Be Labeled as Favorable