Why Is A Cost Variance Important? Why Is Cost Variance Important? Running a cost variance analysis is critical when evaluating any project or business, regardless of its field or industry, because it can reveal important information with regards to a project or period. What do you mean by cost variance? Cost Variance (CV) indicates how
How Do You Know If A Activity Variance Is Favorable Or Unfavorable? A variance is usually considered favorable if it improves net income and unfavorable if it decreases income. Therefore, when actual revenues exceed budgeted amounts, the resulting variance is favorable. When actual revenues fall short of budgeted amounts, the variance is unfavorable. How do
Is A Negative Cost Variance Good Or Bad? You are under budget if the Cost Variance is positive. You are over budget if the Cost Variance is negative. Is a negative variance good or bad? An unfavorable, or negative, budget variance is indicative of a budget shortfall, which may occur because revenues miss or costs