The adverse (unfavourable)variance is:

Question

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The adverse variance is the difference between the budgeted amount and the actual amount, and it is unfavourable when the actual amount exceeds the budgeted amount. In option C, the budgeted payment for wages was $42 000, but the actual wages paid were $45 000, resulting in an adverse variance of $3 000. This suggests that the company overspent on wages and may need to take corrective action to reduce costs. The other options have either no variance or a favourable variance, meaning the actual amount was lower than the budgeted amount.

The Adverse (Unfavourable)variance Is