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* If actual costs are greater than standard costs the variance is adverse. An adverse variance tells management that if everything else stays constant the company’s actual profit will be less than planned.
* If actual costs are less than standard costs the variance is favorable. A favorable variance tells management that if everything else stays constant the actual profit will likely exceed the planned profit.
Rohanie is correct.
Actual profit will be higher than budgeted profit due to favourable variances, and will be lower than budgeted profit due to adverse variances.
You might find it useful to watch my free lecture on variances.
Thanks a lot for reply,
Could you please tell how to find out actual figures from variance and standard
Standard from Variance and actual figures
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