**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**.