A variance has 2 parts- the rate variance and the volume variance. The volume variance occurs from changes in sales volume or unit usage from a standard or budgeted amount. The e rate variance is the difference between the actual price paid and a standard or budgeted price.

This typically applies to factory overhead, and the formula for the calculation of the controllable variance is: Actual overhead expense - (budgeted overhead per unit x standard number of units)

Which of the following will not result in an unfavorable controllable margin difference and why?

Sales under budget; costs over budget

Sales exceeding budget; costs over budget

Sales exceeding budget; costs under budget

Sales under budget; costs under budget