An unfavorable variance is when a company forecasts for a certain amount of income and does reach it. Say they estimated that there would be $10,000 of profit for the quarter and they only got $7,500. In other words, the company hasn't generated as much profit as it had hoped. This could occur if there were inefficiencies in production or the quality of the materials was such that more needed to be used to meet safety or other standards.In this po ...

Unfavorable variances refer to instances when costs are higher than your budget estimated they would be. As mentioned above, materials, labor, and variable overhead consist of price and quantity/efficiency variances. Fixed overhead, however, includes a volume variance and a budget variance. Then divide that number by the original budgeted amount and multiply by 100 to get the percentage of your variance. For example, let's say that Bob is a colleg ...