Large favourable variances between actual and planned performance may indicate:
A) that actual expenses were higher than budgeted expenses.
B) that the firm must be operating efficiently.
C) budget income targets may need to be revised upwards in the future.
D) that actual income was too high and should be revised downwards in the future.

Question

Quizplus · Accepted Answer

Large favourable variances between actual and planned performance usually indicate that the firm is performing better than expected. This may mean that the budget income targets may need to be revised upwards in the future to reflect the current level of performance. The other options are not necessarily true in this scenario.

Large Favourable Variances Between Actual and Planned Performance May Indicate