Question

A favorable variance indicates that​ ________. A. actual operating income is less than the budgeted amount B. budgeted contribution margin is more than the actual amount C. actual revenues exceed budgeted revenues D. budgeted costs are less than actual costs.

Answer 1

The answer is "Option C".

Explanation:

An undesirable change occurs when an actual net profit is below or below the level of performance predicted. It exists when total net profit is above what we expected or when income is below our average. In the given question the other options are not correct that can be described as follows:

• In option A, Actual income shall not be less than the target

• In option B, The estimated margin must not be greater than the current amount.

• In option D, The expense estimate is lower than the actual cost.