Business FinancesQuestion 316 of 690
A contractor compares the budget to actual results and finds materials cost $52,000 against a budgeted $45,000. This $7,000 difference is called a:
a.Favorable variance
b.Contingency
c.Budget variance (unfavorable)
d.Net profit
Explanation
The difference between budgeted and actual amounts is a budget variance. Spending $7,000 more than budgeted on materials is an unfavorable variance because it reduces profit relative to the plan.
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