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How can I make a difference between a favorable and unfavorable variance?

How can I make a difference between a favorable and unfavorable variance?

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Difference between favorable and unfavorable variance:

1 Standard costs: Standard costing is a technique of cost control. It suggests what the reasonable cost should be under given set of condition. Standard cost is a norm of measuring performance. In a manufacturing or service business standards relate to the quantity and price of inputs used in manufacturing goods or providing services. Standards are set for each element of costs like material, labor and overhead on the basis of past experience and technical estimate. Use of standard costs makes the concept of management by exception.

2 Variance Analysis: Standards are set for each element of cost. Price and quantity standards are expressed in the terms of rate and units. As with the direct labor, they are expressed as rate and ...

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