Answer :
Variance is Favorable (F) or Unfavorable (U): When the budgeted elements are more than the actual element then the variance is known as the favorable variance.
What is favorable variance, explain.
The corporate sector places a great deal of importance on budgeting. Management can use a variety of budgeting techniques to choose when to invest in new equipment, expand operations, or fix outdated machinery. Of course, any organization that runs efficiently adheres to some form of budget.
Management typically forecasts business budgets using future projections. In other words, a company's management meets to talk about financial strategies based on the company's present financial performance. They had attempted to forecast the company's future revenues and costs in the event that a particular strategy is adopted. Sounds recognisable? Just a straightforward budgeting procedure.
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