alleryStart learning →An adverse variance exists when budget versus actual leads to what effect on profit?
AHigher than expected
BUnchanged profit
CLower than expected
DDoubled profit
Answer & Solution
Correct answer: C. Lower than expected
An adverse variance reduces profit below what was expected.
Keep practising Standard Costing and Variance Analysis
Browse all Standard Costing and Variance Analysis questions for CA Final, or explore more Cost and Management Accounting topics.
Related questions
Management accounting information is computed by reference to whose needs?Variance analysis compares actual and budgeted cost of which inputs?What happens in management by exception when a deviation from the norm is insignificant?In passive management by exception, when does the manager step in?Under standard costing, where are fixed costs of unsold goods made in a period carried forVariance analysis is a tool of budgetary control and of what other function?Besides costs, variance analysis can also be carried out for which other item?What is the stated purpose of analysing present cost variances?