Unfavorable Variance

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Unfavorable Variance

The actual costs of a project over and above the normal costs of a similar project. Companies try to avoid unfavorable variances by budgeting carefully.
References in periodicals archive ?
PRODUCT/SERVICE OVERVIEW 17Defining Risk & "Risk Management" 17Risk Management: The Rationale 17Value Creation 18Fostering Ethics 18Ensuring Resilience 18Nurturing Innovation 18Benefits of Risk Management 18Contributing to Overall Organizational Objectives 18Establishing a Transparent and Reliable CorporateGovernance Framework 19Safeguarding from Unfavorable Variances and Disasters 19Risk Handling Vs.
Be careful, however, not to interpret favorable variances as "good" and unfavorable variances as "bad.
He said the last two years have produced unfavorable variances in that area, and he said that may be the case again this fiscal year.
If warranted, immediate corrective action should be instituted for unfavorable variances.
1 What is said here in terms of unfavorable variances of course applies, mutatis mutandis, to cost savings which give rise to favorable variances.
Actually, labeling a production variance as either over or under the scheduled amount is equally satisfactory, assuming management considers both kins of unfavorable variances.
During weekly give-and-take meetings, the plant manager and lower-level managers discussed production and scheduling problems, unfavorable variances, interdepartmental conflicts, and related issues.
Since the hospital financial reports sometimes include paid invoices that are not for the current month, the program segregates these unfavorable variances to minimize distortion in the budget.
Higher crude oil sales volumes in the current quarter partially offset these unfavorable variances.
Our analysis so far has shown that Bob's has two large unfavorable variances that reduce its net income: the $34,000 that Bob's lost because of a shift in sales mix toward its lower-end products and the $75,000 Bob's lost because it dropped market share.