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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
How do you calculate income variance?
If looking for a percentage answer, you subtract the smallest number from the largest number and the divide the difference by the largest number. Ex: $2000 - $1560 = $440 / $2000 = 22% Variance. Check your work: $2000 x 22% = $440.
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
How do you determine number of units to produce to maximize operating income?
You continue increasing production as long as the marginal income remains positive.
What is Assumptions for Variance Homogeneous?
Equal in Variance
