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Profit variance is calculated by subtracting the actual profit from the budgeted or expected profit. This can be expressed as: Profit Variance = Actual Profit - Budgeted Profit. A positive variance indicates that the actual profit exceeded expectations, suggesting better performance, while a negative variance indicates underperformance. Analyzing these variances helps identify areas for improvement and informs future budgeting and operational decisions.

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2w ago

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Related Questions

How to calculate the Budget variance percentage?

how to calculate budget variance percentage?


How do you calculate a variance covariance matrix explain with an example?

variance - covariance - how to calculate and its uses


How do you calculate a budget variance as a percentage?

actual budget/budget = variance%


How do you calculate budget variance percentage?

Variance = 100*(Actual - Budget)/Budget


How do you calculate variance given standard deviation?

Square the standard deviation and you will have the variance.


Why do you measure dispersion?

How do we calculate variance


How do you calculate standard deviation if I know variance?

Standard deviation = square root of variance.


How many cases are needed for analysis of variance?

There only needs to be one data point to calculate variance.


How do you calculate standard deviation with a variance of 03?

The standard deviation is the square root of the variance. So, if variance = 03 = 3 the std dev = sqrt(3) = 1.732


How can I calculate portfolio variance in Excel?

To calculate portfolio variance in Excel, you can use the formula SUMPRODUCT(COVARIANCE.S(array1,array2),array1,array2), where array1 and array2 are the returns of the individual assets in your portfolio. This formula takes into account the covariance between the assets and their individual variances to calculate the overall portfolio variance.


Should you calculate the profit on cost or Sales?

We should calculate the profit on sales


How 2 calculate a variance covariance matrix?

look in a maths dictionary