Cost Variance
The difference between an actual cost and its standard cost, labeled favorable when actual is lower and unfavorable when actual is higher.
A cost variance compares what a cost actually was with what the standard said it should be. Price-type variances (material price, labor rate, overhead spending) isolate the effect of paying more or less per unit of input. Quantity-type variances (material usage, labor efficiency, overhead efficiency) isolate the effect of using more or less input than the standard allows for the actual output.
A fixed overhead volume variance is different: it arises when actual production differs from the normal capacity used to set the overhead rate, so it measures capacity use rather than spending.
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