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Is the volume variance a controllable variance from a spending point of view?
No, the volume variance is controllable but not related to spending. The volume variance calculates the dollar impact of producing more or less than the budgeted production volume. No, the volume variance is controllable but not related to spending. The volume variance calculates the dollar impact of producing more or less than the budgeted production volume.
Why is it important to determine the contribution point?
Once the contribution margin is determined, it can be used to calculate the break-even point in volume of units or in total sales dollars.
A favorable fixed overhead volume variance occurs if?
Favourable fixed overhead variance occurs when actual fixed cost is less than the budgeted fixed overhead expenses.
What difference between a favorable variance and an unfavorable variance?
Favourable variance is that variance which is good for business while unfavourable variance is bad for business
What factors causes Budget Variance?
There are 7 variances associated with a budget ( which are generally calculated for controlling purposes) 1- Material Price variance 2- Material Quantity variance 3- Labor rate variance 4- Labor efficiency variance 5- Spending variance 6- Efficiency variance 7- Capacity variance
Is there any difference between sales volume variance and Sales Quantity Variance?
Yes
What is the difference between a sales volume variance and a sales price variance?
Volume is a change in how many products you sell Price is a change in how much you charge for the product
What is the reason for multiplying the sales quantity variance by the budgeted sales price even if the actual sales volume was sold at a different price?
for profit.........
How is the sales-volume variance calculated?
sales vol. variance= standard price(actual sales vol.- std sales vol.) eg.- A= 10(35000-20000)=150000(F) B=6(25000-30000)= 30000(A) F-A= 150000-30000=120000
What is the difference between negative price variance and volume variance?
Negative price variance is when the cost is less than budgeted. Volume variance is a variance in the volume produce.
Example of calculating Sales Mix Variance?
SALES MIX VARIANCE= standard sales-revised std sales
Is the volume variance a controllable variance from a spending point of view?
No, the volume variance is controllable but not related to spending. The volume variance calculates the dollar impact of producing more or less than the budgeted production volume. No, the volume variance is controllable but not related to spending. The volume variance calculates the dollar impact of producing more or less than the budgeted production volume.
What is V ratio?
The Profit Volume (PV) Ratio is the ratio of Contribution over Sales. It measures the Profitability of the firm and is one of the important ratios for computing profitabilty. The Contribution is the extra amount of sales over variable cost. Contribution is also Fixed cost plus profit. Profit = Sales - Variable Cost - Fixed Cost. Thus Contribution is: Profit + Fixed Cost = Sales - Variable Cost. Therefore PV Ratio = (Contribution/Sales)X100. (This as a percentage of sales)
What does a sales volume variance measure?
A sales volume variance measures the difference between the actual quantity of units sold and the budgeted quantity of units sold, multiplied by the standard selling price. It indicates the impact of changes in sales volume on a company's revenue and is used to assess the effectiveness of sales strategies and forecasts.
What is p v ratio?
The Profit Volume (PV) Ratio is the ratio of Contribution over Sales. It measures the Profitability of the firm and is one of the important ratios for computing profitabilty. The Contribution is the extra amount of sales over variable cost. Contribution is also Fixed cost plus profit. Profit = Sales - Variable Cost - Fixed Cost. Thus Contribution is: Profit + Fixed Cost = Sales - Variable Cost. Therefore PV Ratio = (Contribution/Sales)X100. (This as a percentage of sales)
What are the variances in a 4 variance analysis?
efficiency variance, spending variance, production volume variance, variable and fixed components
What causes a volume variance?
a + or a-
