When Would a Variance Be Labeled as Unfavorable

question 31

Multiple Choice

When would a variance be labeled as unfavorable?

• A) When standard costs are more than actual costs
• B) When expected sales are less than actual sales
• C) When actual sales are equal to expected sales
• D) None of these answers are correct.

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Definitions:

Surplus

Surplus is a condition where the quantity supplied of a product exceeds the quantity demanded at a specific price, often leading to decreases in price.

Price Floor

A government or regulatory-imposed minimum price that can be charged for a good or service, below which it cannot legally be sold.

Milk

A nutrient-rich liquid food produced by the mammary glands of mammals, commonly consumed by humans.

Market Equilibrium

A condition or state in which the supply of a product matches its demand, leading to a stable price.