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

Question

Quizplus · Accepted Answer

A favorable variance occurs when actual costs are less than standard costs, indicating that the company is spending less than anticipated.

When Would a Variance Be Labeled as Favorable