An unfavorable variance:
A)may suggest investigation is needed
B)is conclusive evidence of poor performance
C)demands that standards be recomputed
D)indicates continuous improvement is needed

Question

Quizplus · Accepted Answer

An unfavorable variance would suggest that the actual results are worse than the expected or budgeted results. This would typically trigger an investigation into the cause of the variance so that corrective actions can be taken. Therefore, choice A is the best answer. The other choices are not accurate because an unfavorable variance does not necessarily mean poor performance, demand that standards be recomputed, or indicate continuous improvement is needed.

An Unfavorable Variance