Question

Unfavorable variance that occurs when:

A. actual costs are greater than budgeted costs.
B. actual costs are lower than budgeted costs.
C. actual costs equals budgeted costs.
D. actual costs are lower than sunk costs.

Answer 1

It’s A
because When the amount of actual expense is greater than the standard or budgeted amount. Thus, actual expenses of $250,000 versus a budget of $200,000 equals an unfavorable expense variance of $50,000.