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What else can I help you with?
Is the materials price variance the least significant from a standpoint of cost control?
NO - Fixed Overhead Volume Variance
Why would a favorable price variance for material might be the cause of unfavorable quantity variance?
A favorable/unfavorable price variance does not effect your quantity variance. The reason you would see a favorable price variance and an unfavorable quantity variance is because you consumed more materials than your standard allows AND the price you paid for those material was less than your standard price. If you paid more than your standard price, you would have experienced an unfavorable variance in both quantity and price.
Why then should calculate a material price variance?
Material variance should be calculated to ensure that you are setting the right price for your products. When the price varies significantly, you may need to establish a new price for the product.
Will the direct labor price variance always be unfavorable if more hours are worked than the standard hours allowed for the actual output attained?
No, Direct labor price variance is created due to difference in standard labor rate and actual labor rate for example standard labor rate per unit is 10 and actual labor rate is 11 then 1 per unit is unfavourable direct labor price variance.
What is the difference between cost and list price?
whats the difference between cost and list?
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.
When computing standard cost variances the difference between actual and standard price multiplied by actual quantity yields what?
Price Variance
Is the materials price variance the least significant from a standpoint of cost control?
NO - Fixed Overhead Volume Variance
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 the difference between VWAPY and VWAGY?
The main difference between VWAPY and VWAGY is that VWAPY represents the volume-weighted average price of a stock for the entire year, while VWAGY represents the volume-weighted average price of a stock for the entire day.
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.........
Why would a favorable price variance for material might be the cause of unfavorable quantity variance?
A favorable/unfavorable price variance does not effect your quantity variance. The reason you would see a favorable price variance and an unfavorable quantity variance is because you consumed more materials than your standard allows AND the price you paid for those material was less than your standard price. If you paid more than your standard price, you would have experienced an unfavorable variance in both quantity and price.
Why is the sales variance mutliplied by the budget price and not the actual price?
The sales variance is multiplied by the budget price rather than the actual price to provide a clearer assessment of performance against expectations. This approach isolates the impact of volume changes from price changes, allowing businesses to evaluate how well they adhered to their planned sales strategy. By using the budget price, it standardizes the variance analysis, enabling more accurate comparisons and insights into operational efficiency and market conditions.
How do you calculate material price variances and what are the possible reasons for such variances?
Following are the causes of material price variance: 1.There could have been recent changes in purchase price of materials. 2.Price variance can be due to substituting raw materials different from the original material specification. 3.Price variance can be attributed to the non availability of cash discounts which was originally anticipated at the time of setting the price standards. 4.Changes in transportation costs and storekeeping costs can also be contributing factors to material price variance.
How do you compute market price variance?
Price Variance = (Actual Price/Unit - Budgeted Price/Unit) x Actual Quantity of Output = (AP - SP) x AQ
What does shrinkage means in retail?
Shrinkage is the difference between the stock on the inventory book and the actual physical stock. Shrinkage is also deifned as the difference between the value ( retail price ) of the stock on the inventory book and the value of the ( retail price ) actual physical stock. Shrinkage % is calculated as the difference between the value ( retail price ) of the stock on the inventory book and the value of the ( retail price ) actual physical stock by the retail sales of this volume
Why then should calculate a material price variance?
Material variance should be calculated to ensure that you are setting the right price for your products. When the price varies significantly, you may need to establish a new price for the product.
