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Variance is the difference between total actual costs and total standard costs. The variance is expressed in total dollars, and not on a per unit basis.

If actual costs are less than standard costs, the variance is favorable. When actual costs exceed standard costs, the variance is unfavorable.

 Actual costs – Standard costs = Total Variance

In statistics, the square of the standard deviation; used to measure the spread of scores in a particular test or experiment is called variance.

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