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.
Variable overhead expenditure variance in standard costing is the difference between the budgeted variable overhead expenses and the actual variable overhead expenses incurred.
