What Does It Mean When You Have A Negative Variance? Negative variances are the unfavorable differences between two amounts, such as: The amount by which actual revenues were less than the budgeted revenues. The amount by which actual expenses were greater than the budgeted expenses. What happens if your variance is negative? Negative Variance Means
How Can Budget Variance Be Avoided? For example, if your budgeted expenses were $200,000 but your actual costs were $250,000, your unfavorable variance would be $50,000 or 25 percent. Often budget variances can be eliminated by analyzing your expenses and allocating an expensed item to another budget line. How do you reduce budget deviations? Budgeting
When Direct Labor Rate Unfavorable Variances Occur Possible Reasons Could Be? Usually, labor rate variance does not occur due to change in labor rates because they are normally predictable. The common reason of an unfavorable labor rate variance is inappropriate use of labor by production supervisors. All tasks do not require equally skilled workers. What