What Does an Unfavourable Variance Indicate

question 98

Multiple Choice

What does an unfavourable variance indicate?
Variant question

• A)The actual amount decreased operating profit relative to the budgeted amount
• B)Actual costs are less than budgeted costs
• C)Actual revenues exceed budgeted revenues
• D)All of these answers are correct.

---

Definitions:

Fixed Costs

Expenses that do not change with the level of production or sales in the short term, such as rent, salaries, and insurance.

Break-even Point

The point at which total costs and total revenues are equal, resulting in no net loss or gain.

Property Taxes

Taxes paid by property owners to local governments based on the assessed value of their property.

Unit Variable Costs

The costs that vary directly with the volume of production, such as materials and labor.