~Variance Analysis 6-column - - 250,000- 10,000 a) -...

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Page 1 of 1 VARIANCE ANALYSIS – 6-Column 1 2 3 4 5 6 Budget Actual c) Efficiency Flexible Volume Master Static Description $$ / unit Results Variance Budget Variance Budget Variance aaaaaaaaaaa $$ / # Actual Units Actual Units Budget Units Column 1 5 @ Column 1 3 @ Column 3 5 @ or Column 2 + 4 Actual $$ / unit Budget $$ / unit Budget $$ / unit F OR E XAMPLE : Budget Actual d) Spending Flexible b) Volume Master Static Description $$ / unit Results Variance Budget Variance Budget Variance Physical Units 100,000 100,000 10,000 90,000 10,000 =========== ======== ======== ======== ======== ======== ======== Sales $ 10.00 $ 1,008,000 8,000 1,000,000 100,000 900,000 108,000 - Variable Expenses - 6.00 - 620,000 - 20,000 - 600,000 - 60,000 - 540,000 - 80,000 Contribution Margin 4.00 388,000 - 12,000 400,000 40,000 360,000 28,000 - Fixed Expenses
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Unformatted text preview: - 250,000- 10,000 a) - 240,000- 240,000- 10,000 Operating Income $ 138,000- 22,000 160,000 40,000 120,000 18,000 ======== ======== ======== ======== ======== ======== a) Since Fixed Costs do not vary with volume, they CANNOT have a volume variance. b) Volume Variance can also be computed as Physical Units * Budget $$/unit. c) Efficiency Variance consists of a Volume Variance and a Spending Variance; and only occurs in a multiple driver analysis. d) Since this example is a single driver analysis, this is just a Spending Variance. Developed by Terrence G Peterson, All Rights Reserved 92b31877e6f8d6669ffa9f8f6dd3523bcc7ea61a.doc ProfTGP@aol.com...
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