Profit variances, Cost Accounting

PROFIT VARIANCES

Sales variances are important as they have a direct bearing on profits earned by the organization.   thus, they can be used as the basis of determining profit variance. The overall Profit Variance is categorized into - i) Sales price variance and ii) Sales Volume Variance, which is sub- categorized into - a) Sales Price variance b) Sales Volume Variance and iii) Cost Variance.  Except Cost Variance, there is no differentiation between a variety of Sales Variances and Profit Variances.

Overall Sales Variance = Standard / Budgeted profit - Actual profit (Unfavorable) (or) Actual Profit - Standard / Budgeted profit (Favorable)

Cost Variances: They get arise when actual costs are not similar from standard costs.

Cost Variances = (Standard cost - Actual cost) Actual quantity sold (Favorable) (or) (Actual cost - Standard cost) Actual quantity sold (Unfavorable)

Posted Date: 10/15/2012 7:39:21 AM | Location : United States







Related Discussions:- Profit variances, Assignment Help, Ask Question on Profit variances, Get Answer, Expert's Help, Profit variances Discussions

Write discussion on Profit variances
Your posts are moderated
Related Questions
Cost Data Determination How does one decide the cost data for products and the services which are the end result of the productive processes? The response to this question is m

The data set for the assignment is about breast cancer.  Some of these data have been changed for the purposes of this assignment so the results from the analysis of this file may

Assumptions of CVP This chapter has given information on how to apply CVP for the business analysis. Most of this analysis is keyed to the model of how profitability is impacte

A provision must be made in advance for those debts whose recovery is uncertain and to writing off bad debts. Each enterprise, depends on their past experience, make a provision fo

Match the items below by entering the appropriate code letter A. Controller B. Deficit C. Payout Ratio D. Stock Dividend E. Declaration Date F. Preemptive right G. Par Value H. L

Costs and Revenue Cost of the development work done in-house to 1 January 2009 has been £1.5m with a further cost of £50,000 per month from now until the software is ready

Cal Farms reported a supplies expense of $2,000,000 a year. The supplies amount decreased by 200,000 during the year to an ending balance of $400,000. What was the cost of supplies

Given the information that follows, prepare a cash budget for the XYZ Store for the first six months of 2010. All prices and costs remain constant. Sales are 90% for cre

West Industries is a highly decentralized corporation with independent operating divisions. Each division is evaluated and rewarded based on its total net income. One of the divisi

Determine whether process is under control: Hall's refrigeration and heating company is concerned about complaints from their customers about some of their technicia