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VARIANCE FAVOURABLE OR ADVERSE

This topic has 1 reply, 2 voices, and was last updated 9 months ago by John Moffat.

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April 18, 2022 at 5:59 pm #653820
baraka42
Participant
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Good evening Sir,
I am currently on the lecture for variances however, what I am confused about is the fact that you stated that the variance should be an adverse instead of Favourable.
So the Actual purchase at STD COST is 517275 and
The ACUTAL PURCHASED AT STD COST 544500
Shouldn’t that be a favourable variance instead of adverse
April 19, 2022 at 8:33 am #653868
John Moffat
Keymaster
- Topics: 57
- Replies: 51555
512,275 is the actual purchases at actual cost (not at standard cost as you have typed).
Since the actual cost is lower than the standard cost the variance is favourable.
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