Filed under: University
For all of you who need a bit of help with their Variance Analysis equations (BMAN10632) here is a simple way to remember them, discovered by me and Vikash 13 hours before the exam, procrastination champions :p
Just in time for the exam I know 
hehe
With the exception of Sales Volume (see vi) the rules to follow is
i) If the variance deals with money paid into the company
Variance = (actual – flexed) x something (see iii)
If result is positive the variance is favourable
else the variance is adverse
ii) If the variance deals with money paid out of the company
Variance = (flexed – actual) x something (see iii)
If result is positive the variance is favourable
else the variance is adverse
iii) If you looking for volume :
something = the actual unit price/rate
of the variable factor ure looking for
else if you looking for price :
something = the actual unit quantity/volume
of the variable factor ure looking for
iv) For Sales Volume Variance the formula is :
SVV = (actual units sold – budgeted units sold)
* contrib per unit [from orig. budget]
v) Actual Profit = Orig. Budget + Fav Variances – Adverse Variances
I hope this helps Share with who-ever needs help.
No Comments so far
Leave a comment
Leave a comment
Line and paragraph breaks automatic, e-mail address never displayed, HTML allowed:
<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>