A project shows estimated cost of $52,000 and actual cost of $49,400. What cost variance is shown?
Correct Answer
A) $2,600 favorable.
Actual cost is $2,600 below estimate, so the variance is favorable.
Why This Is the Correct Answer
Actual cost is $2,600 below estimate, so the variance is favorable.
Why the Other Options Are Wrong
Option B: $2,600 unfavorable.
$2,600 unfavorable. is not aligned with the supported result for budget variance; it has the wrong label or classification even if the number looks close.
Option C: $101,400 favorable.
$101,400 favorable. is above the supported result for budget variance; it likely adds an unsupported amount or compares the wrong financial base.
Option D: $49,400 unfavorable.
$49,400 unfavorable. is above the supported result for budget variance; it likely adds an unsupported amount or compares the wrong financial base.
Memory Technique
Budget Variance drawer for Reviewing Job-Cost: label actual before counting dollars.
Reference Hint
Study anchor (closed-book): memorize Budget variance from CSLB Law and Business Study Guide; CSLB 2026 Law Book / CSLB Law and Business Study Guide Business Finances; know the rule or calculation trigger without relying on exam-room lookup.
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