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 Accounting Cost accounting has been defined via many accounting scholars in different forums. There is no single watertight definition of cost accounting, however the var

Accounts are prepared according to accounting concepts, principles and conventions. As final accounts are prepared on accrual basis, this becomes essential to subtract all those ex

The level of activity at which total revenues eqivalent total costs. A point at which there is no profit and no loss.

Methods of Work in Progress The two main methods used for purposes of valuing the opening work in progress: 1. Weighted Average Method 2. FIFO or First In First out Meth

31. Special Orders Maria’s Food Service provides meals that nonprofi t organizations distribute to handicapped and elderly people. Here is her forecasted income statement for April

Campground Inc. is considering the production and sale of propane lamps. Annual fixed costs associated with the project are expected to total $60,000. In addition, each lamp would

Moore Corporation follows a policy of a 10% depreciation charge per year on all machinery and a 5% depreciation charge per year on buildings (the corporation uses the nearest full

I'm having a hard time with this, can you please help? I know the dates are imparative also in finding the solution. Stevens purchased an auto on Jan 1, 2001. On December 31, 2003

The Zooline Company (Pty) Ltd is an American based company that focuses on the LSM 8 -10 markets. They do vehicle interiors, raise or lower suspensions and install top end sound sy

Motivation - Behavioural Aspects of Standards Variance analysis and standards setting requires to be carried out like it motivates managers and other employees. It should not