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What is a favorable variance and what is an unfavorable variance? How do you calculate them?...

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Accounting

What is a favorable variance and what is an unfavorablevariance? How do you calculate them? Is a favorable variance alwaysa bad thing and is an unfavorable variance always a good thing? Whyor why not?

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An unfavorable variance is when costs are greater than what has been expected The sooner these variances can be detected the sooner management can address the problem and avoid a loss of profit Unfavorable variances often indicate that something did not go according to plan financially Favorable    See Answer
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