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Favorable and unfavorable variances

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Should both favorable and unfavorable variances be investigated, or only the unfavorable ones? Explain.

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The response addresses the queries posted in 622 words with references.

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The response addresses the queries posted in 622 words with references.

//Prior to talk about the favorable and unfavorable variances investigation, we have to initially,, clearly understand about the variances analysis, so that it will be very easy to key out the favorable and unfavorable variances. So, first of all, we will have to understand the variance analysis under the heading of Introduction, for example://

Introduction:

Variance analysis is defined as the analysis of the cost variances into cost component parts and the explanation of variances. Therefore, variance analysis forms a part of the control process and it involves the calculation of variance and interpretation of results so as to localize the different factors that are responsible for the variance. Thus, the magnitude and causes of each of the variance can be ascertained variance so that corrective action may be taken. (Cost Management)

//Above, we discussed about the variances analysis, which is mainly examination of the cost variances. In this part, we will firstly discuss about the meaning of favorable ...

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