When a company is using standard costs, a favorable variance is a definite indication that a manager is doing a good job.

Name: When a company is using standard costs, a favorable variance is a definite indication that a manager is doing a good job.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

A favorable variance, while indicating costs were lower than expected, does not necessarily mean a manager is doing a good job. It could result from lower quality materials, underpaying staff, or other factors that might harm the company in the long run.

When a Company Is Using Standard Costs, a Favorable Variance