3) A favorable variance indicates which of the following outcomes?

A. A favorable variance has the effect of decreasing individual variable costs.

B. A favorable variance has the effect of increasing operating income relative to the budgeted amount.

C. A favorable variance has the effect of increasing the static budget variance.

D. A favorable variance has the effect of increasing output relative to the previous budget cycle.

E. A favorable variance has the effect of decreasing operating income relative to the budgeted amount.