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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.
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.
Materials and labor may be allocated based on past experience, or standard costs. Where materials or labor costs for a period fall short of or exceed the expected amount of standard costs, a variance is recorded. Such variances are then allocated among cost of goods sold and remaining inventory at the end of the period.
The cost-volume-profit analysis is the systematic examination of the relationship between selling prices, sales, production volumes, costs, expenses and profits. This analysis provides very useful information for decision-making in the management of a company.
Price variance (Vmp) is a term used in cost accounting which denotes the difference between the expected cost of an item (standard cost) and the actual cost at the time of purchase. [1] The price of an item is often affected by the quantity of items ordered, and this is taken into consideration.
From January 2008 to December 2012, if you bought shares in companies when John V. Faraci joined the board, and sold them when he left, you would have a 7.0 percent return on your investment, compared to a -2.8 percent return from the S&P 500.
Volume risk, also known as quantity risk, is the risk of production or sales volumes materially and adversely deviating from their expected quantities. [ 1 ] [ 2 ] It is context-specific. As regards commodity risk , [ 3 ] a major concern is yield risk, which is the uncertainty regarding production fearing insufficient quantities of the ...
A Maryland jury finds 'Real Housewives of Potomac' star Karen Huger guilty of driving under the influence and several other charges after she was arrested earlier this year.