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Variance analysis can be carried out for both costs and revenues. Variance analysis is usually associated with explaining the difference (or variance) between actual costs and the standard costs allowed for the good output. For example, the difference in materials costs can be divided into a materials price variance and a materials usage variance.
Algorithms for calculating variance play a major role in computational statistics.A key difficulty in the design of good algorithms for this problem is that formulas for the variance may involve sums of squares, which can lead to numerical instability as well as to arithmetic overflow when dealing with large values.
There are two reasons actual sales can vary from planned sales: either the volume sold varied from the expected quantity, known as sales volume variance, or the price point at which units were sold differed from the expected price points, known as sales price variance. Both scenarios could also simultaneously contribute to the variance.
The constraint on production of the railcoaches was the metalwork shop. She made an analysis of profit and loss if the company took the contract using throughput accounting to determine the profitability of products by calculating "throughput" (revenue less variable cost) in the metal shop.
Let a be the value of our statistic as calculated from the full sample; let a i (i = 1,...,n) be the corresponding statistics calculated for the half-samples.(n is the number of half-samples.)
The "arithmetic effect" assumes that tax revenue raised is the tax rate multiplied by the revenue available for taxation (or tax base). Thus revenue R is equal to t × B where t is the tax rate and B is the taxable base (R = t × B). At a 0% tax rate, the model states that no tax revenue is raised.
The precise formula is a function of the central moments of the return distribution. [ 5 ] ) The mathematics behind the volatility tax is such that a very large portfolio loss has a disproportionate impact on the volatility tax that it pays and, as Spitznagel wrote, this is why the most effective risk mitigation focuses on large losses:
Realized variance or realised variance (RV, see spelling differences) is the sum of squared returns.For instance the RV can be the sum of squared daily returns for a particular month, which would yield a measure of price variation over this month.