In management control, point of reference for making comparisons of performance is expected performance. The expected performance is based on the overall distribution that is fit to your data and estimates the nonconforming parts that you can expect to be outside the specification limits.
If actual payment to labour is $1200 and budgeted rate is $1000, then labour price variance would be unfavourable. An unfavorable variance means that the cost of labor was more expensive than anticipated, while a favorable variance indicates that the cost of labor was less expensive than planned.
An expected performance of company is also known as