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Sales volume variance can be considered favorable or unfavorable. Causes of sales volume variance include changes in competition and sales prices, changes in consumer desires (i.e. fashion trends over time), and impositions or removals of government trade restrictions. [2]
The behavior of both costs and revenues is linear throughout the relevant range of activity. (This assumption precludes the concept of volume discounts on either purchased materials or sales.) Costs can be classified accurately as either fixed or variable. Changes in activity are the only factors that affect costs.
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.
Control charts are graphical plots used in production control to determine whether quality and manufacturing processes are being controlled under stable conditions. (ISO 7870-1) [1] The hourly status is arranged on the graph, and the occurrence of abnormalities is judged based on the presence of data that differs from the conventional trend or deviates from the control limit line.
In statistical quality control, the individual/moving-range chart is a type of control chart used to monitor variables data from a business or industrial process for which it is impractical to use rational subgroups. [1] The chart is necessary in the following situations: [2]: 231
Traditional approaches limit themselves by defining cost behavior only in terms of production or sales volume. In the late 1980s, accounting practitioners and educators were heavily criticized on the grounds that management accounting practices (and, even more so, the curriculum taught to accounting students) had changed little over the ...
Marketing mix modeling (MMM) is an analytical approach that uses historic information to quantify impact of marketing activities on sales. Example information that can be used are syndicated point-of-sale data (aggregated collection of product retail sales activity across a chosen set of parameters, like category of product or geographic market) and companies’ internal data.
Decomposing Sales as Contribution plus Variable Costs. In the Cost-Volume-Profit Analysis model, costs are linear in volume. In cost-volume-profit analysis , a form of management accounting , contribution margin—the marginal profit per unit sale—is a useful quantity in carrying out various calculations, and can be used as a measure of ...