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Nelly Montes
on Nov 13, 2024

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If actual costs are greater than standard costs there is a(n)

A) normal variance.
B) unfavorable variance.
C) favorable variance.
D) error in the accounting system.

Unfavorable Variance

The difference between actual costs and standard or budgeted costs when actual costs are higher, indicating lower profitability.

Actual Costs

The real, specific expenses incurred or required to perform an operation, produce an item, or offer a service.

Standard Costs

Predetermined costs to manufacture a single unit or a number of units during a specific period under current or anticipated operating conditions.

  • Isolate and assess variations in direct materials (for quantity and pricing) and direct labor (with respect to work efficiency and rate of pay).
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Noosh ZakeriNov 15, 2024
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