Which type of variance indicates revenues greater than budget?

The type of variance that indicates revenues greater than what was budgeted is referred to as a favorable variance. This occurs when actual revenues exceed the planned budget, signaling that the financial performance of the organization is better than anticipated. Favorable variances are vital for organizations as they suggest increased income, which can contribute to improved financial health and can provide opportunities for further investments or growth.

In contrast, neutral variance typically indicates that there is no significant difference between actual performance and budgeted expectations and does not necessarily indicate financial performance. Unfavorable variance, on the other hand, denotes situations where actual revenues fall short of budget, leading to potential concerns about financial performance. Negative variance is usually synonymous with unfavorable variance, indicating a decline in performance as well. Therefore, in the context of revenues being greater than budget, the concept of a favorable variance accurately captures the positive financial outcome.