Some financial variances show increases in operating income relative to a budgeted or allocated amount, and others show decreases in operating income.Respectively, these variances are
A)budgeted, standard.
B)favourable, unfavourable.
C)standard, budgeted.
D)unfavourable, favourable.
E)fixed, variable.

Question

Quizplus · Accepted Answer

Favourable variances show an increase in operating income relative to a budgeted or allocated amount, which is generally seen as a positive outcome. Unfavourable variances, on the other hand, show a decrease in operating income relative to a budgeted or allocated amount, which is generally seen as a negative outcome. Therefore, option B, favourable and unfavourable, is the best choice. The other options do not accurately describe the nature of the variances.

Some Financial Variances Show Increases in Operating Income Relative to a Budgeted