Budget variances can sometimes occur due to unanticipated changes in the price of direct materials, direct labour or overhead costs.

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Budget variances occur when there are differences between the budgeted amounts and the actual amounts incurred/spent. These can be due to changes in prices or costs of direct materials, direct labor, or overheads that were not anticipated when the budget was prepared.

Budget Variances Can Sometimes Occur Due to Unanticipated Changes in the Price