If actual costs were greater than budgeted cost, what type of variance would it be and how would the variance be written?

Question:- If actual costs were greater than budgeted cost, what type of variance would it be and how would the variance be written?

Answer: This situation would produce an unfavourable variance because it is the real cost of product that lies beyond the planned cost incorporated in the budget. Individual sundries here worked by separating the actual period amount from the budgeted or standard account amount. Where the actual expenses are above the expected or the amount budgeted for it, this falls under an unfavourable cost variance. This sort of variance is usually given in the form of a negative measure or presented as a cumbersome figure. For example, if the budgeted cost for a project was $50,000, but the actual cost incurred was $55,000, the unfavourable cost variance would be written, for example, where the budgeted control for a particular project cost was $50,000 but the actual amount expended was $55,000, then the unfavourable cost variance would be written as CV = Actual Cost-Budgeted Cost = $ 55,000- $ 50,000= $ 5,000 Explanation: Thus when the difference is a negative ($ 5,000) then the variance is considered unfavourable or The negative cost variances point at either an increase in the cost of something in the company or the project concerning the earlier plan or budget because of inefficiencies or emergence of new costs per unit.