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
Your company completed the site work for the South Pointe office complex. The costs are shown in Figure 11-3. The site concrete labor and landscaping were done by subcontractors. T

explain various type of cost ccounting

Types of Standard Costs The standard cost set could be ideal, basic, attainable or current. i. Basic Standards: These are long term standards that would keep unchanged ov

XYZ Co. manufactures automation machinery according to customer specifications.  The company is relatively new and has grown each year.  XYZ Co. operated at about 75% of practical

Direct Labour Rate Variance It is the difference among the actual direct labour rate and the standard direct labour rate for the total hours worked. Utilizing an equation,

CVP Analysis in Situations Subject To Change Revenue and Cost will change and also sales volume because of a number of factors involving: a) Increased competition may need

Important Aspect Regarding to Service Cost Centres The basis selected should be one that is judged to be the mainly equitable way of sharing the service costs of department

The Clash Company uses Normal Job-Order Costing in its individual production department.  Overhead is applied to jobs by a predetermined rate, which is depend on machine hours.  Th

The beginning inventory balances of Item X on August 1 and the purchases of the item during the month of August were as follows: August 1 Beginning Inventory 600 units @ $10.00