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

Peter Coffin and Paul Bearer own The Grave Undertaking, Inc. and their firm uses a predetermined overhead rate to apply overhead to the production of custom-built coffins.  They us

Gerona Company authorized the sale of $300,000 of 10%, 10-year debentures on January 1, 2008. Interest is payable on January 1 and July 1. The entire issue was sold on April 1, 200

are exploration cost treated as an asset or expense or both?

An industrial drill costs $60.000 to purchase and $10,000 to install seven years ago. The market value now is $33.000 and this will decline by 12% of current value each year for th

Q. A firm's total cost function is given by TC = 2Q 2 + 10. What are the firm's fixed cost, variable cost, average fixed cost, average variable cost, and marginal cost functions?


At the end of Ehlinger Department Store's fiscal year on December 31, 2012, these accounts appeared in its adjusted trial balance: Freight-In $ 7,200

Bakers Bagels LLC produces and sells 20 types of bagels by the dozen. Bagels are priced at $6.00 per dozen (or $0.50 each) and cost $.020 per unit to produce. The company is consid

Marginal analysis finds to equalize the cost of producing one more item (marginal costs) with the revenue gained from selling one more item (marginal revenue).