In standard costing and budgetary control, a favourable variance is any difference between the actual and budgeted performance of an organization where this creates an addition to the budgeted profit. For example, a favourable variance may occur if the actual sales revenue is greater than that budgeted or if actual costs are less than budgeted costs.
Variance in standard costing and budgetary control refers to the difference between the standard or budgeted levels of cost or income for an activity and the actual costs incurred or income achieved.
