In: Accounting
in what condition will a variance results an unfavorable variance ?
Condition that a varaince results an unfavorable variance
Actual Cost - Standard/expected Cost = Unfavorable variance
Where the actual cost is more than the expected cost then such variance is called unfavorable varaince
As in the same way
Standard/expected Revenues - Actual Revenue = Unfavorable variance
Where actual revenue is less than the expected revenues then such variance is called unfavorable variance.
Thus from the above the simple condition for which the variance results an unfavorable variance is that the actual costs exceed the standard costs or budgeted costs. Also, the amount by which actual revenues are less than the budgeted revenues.
For example: