We have learned about Standard costs and associated variances in this chapter. Can a favorable variance...

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Accounting

We have learned about Standard costs and associated variances inthis chapter. Can a favorable variance be a bad thing? Describe arealistic scenario where a favorable variance could bedetrimental(have unwanted consequences elsewhere in thebusiness).

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Yes a favourable variance can be a bad thing for the business on overall basis A case of material cost variance is explained below Scenario Let us a take a case of raw material purchase for a business Suppose if a new See Answer

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