Bec #5 Variance Analysis

Front 1

Sales Volume variance =

Back 1

(Actual units sold - Budgeted sales units) x Standard contribution per unit
Like Q variance : AQ x SP - SQ x SP

Front 2

Sales mix variance =

Back 2

( Actual product Sales mix ratio - Budgeted product Sales mix ratio) x Actual sold units x Budgeted contribution margin per unit

Like PRICE VARIANCE = (1) – (2)
(1)AQ X AP ____(2)AQ x SP_____ (3) SQ x SP

PRICE VARIANCE = (1) – (2)

Front 3

Prime costs are ________ costs

Back 3

variable

Front 4

Sale in UNITS =

Back 4

sale / sale per unit

Front 5

Summary:

What are the six main formulas for calculating breakeven?

Back 5

CM = SRev - Var Costs

CMU = SPU - VCU

BPU = TFC/CMU

BPD = TFC/CMR

CMR = CM/SRev

BP w/Targeted Profit =
TFC/CMU or CMR

Front 6

Calculate Equivalent units W-Avg and FIFO

Back 6

Units completed ___________ XXX
Ending WIP % x completed + XXX
Weighted-Avg. Equivalent units =XXX
Beginning WIP % x completed - XXX
FIFO Equivalent units ________=XXX

Front 7

PRICE VARIANCE?

Back 7

(1) AQ X AP ____(2)AQ x SP_____ (3) SQ x SP

PRICE VARIANCE = (1) – (2)
Materials purchase price variance
Labor rate variances
Variable OH spending variance

Front 8

QUANTITY VARIANCE?

Back 8

QUANTITY VARIANCE = (2) – (3)
Materials quantity variance
Labor efficiency variances
Variable OH efficiency variance

(1) AQ X AP ____(2)AQ x SP_____ (3) SQ x SP

Front 9

To calculate the difference in NI using Variable costing VS Absorption costing:

Back 9

If level of Production if > than level of sale -> NI under Variable costing is < than under Absorption costing. To calc. 1) Difference in units = Production – sale units. 2) Difference in NI = (1) X Fixed cost / production units.
Variable costing = DL + DM + Variable OH.