Sales Price Variance: Formula: Sales Price Variance
Rate means Sales rate
Product X
(Difference b/w base year rate and current year rate) x Current Sales (in units)
Product Y
(Difference b/w base year rate and current year rate) x Current Sales (in units)
Product Z
(Difference b/w base year rate and current year rate) x Current Sales (in units) SALES PRICE VARIANCE
Product
Base Year Sales Rate
OR Current Year Sales Rate
Variance
Current Sales (in units)
X
5
6.6
1.6 Fav
10,000
Y
4
3.5
0.5 Unfav
4,000
Z
2.6
3
0.4 Fav SALES PRICE VARIANCE
20,000
Sales Volume Variance: Formula: Sales Volume Variance Product X
(Difference b/w base year units and current year units) x Base year rate
Product Y
(Difference b/w base year units and current year units) x Base year rate
Product Z
(Difference b/w base year units and current year units) x Base year rate SALES VOLUME VARIANCE
Product
Base Year Units
OR Current Year Units
Variance
X
8,000
10,000
Y
7,000
4,000
Z
20,000
20,000
Base year Sales Rate
2,000 Fav
5
3,000 Unfav
4
0 SALES VOLUME VARIANCE
2.60
Cost Price Variance: Formula: Cost Price Variance
Rate means cost rate
Product X
(Difference b/w base year rate and current year rate) x Current Sales (in units)
Product Y
(Difference b/w base year rate and current year rate) x Current Sales (in units)
Product Z
(Difference b/w base year rate and current year rate) x Current Sales (in units) COST PRICE VARIANCE
Product
Base Year Rate
OR Current Year Rate
Variance
Current Sales (in units)
X
4
4
0
10,000
Y
3.5
3.5
0
4,000
Z
2.18
2.80
0.63 Unfav. COST PRICE VARIANCE
20,000
Cost Volume Variance: Formula: Cost Volume Variance
Rate means cost rate
Product X
(Difference b/w base year units and current year units) x Base year rate
Product Y
(Difference b/w base year units and current year units) x Base year rate
Product Z
(Difference b/w base year units and current year units) x Base year rate COST VOLUME VARIANCE
Product
Base Year Units
OR
X
8,000
Current Year Units
Variance
10,000
2,000 Unfav
Base year Cost Rate 4
Y
7,000
4,000
Z
20,000
20,000
3,000 Fav
3.50
0 COST VOLUME VARIANCE
2.18
If nos. of units increased (in sales) resulting increase in the cost spending
Sales Mix Variance: Formula (Difference b/w current year sales and current year sales at base year mix) x Base year G.P. Product
Current year Sales
Base year Mixing %
Current year sales at base yr. Mixing
Variance
Base year Gross Profit
X
10,000
0.2286
7,771
2,229 Fav
1.00
Y
4,000
0.2000
6,800
2,800 Unfav
0.50
Z
20,000 34,000
0.5714 1
19,429 34,000
Base year sales mixing ratio: Product
Base yr Sales
Base year Mixing ratio
X
8,000
0.2286
Y
7,000
0.2000
Z
20,000 35,000
0.5714 1
Final Sales Volume Variance
571 Fav 0.425 Sales Mix Variance
Formula: (Difference b/w base years and current sales (in units)) x average base year gross profit per unit W-1
Average base year gross profit per unit =
Total Gross profit Total Nos. of units = $ 20,000 35,000 units
=0.5714
Formula: (Difference b/w Total base years and Totalcurrent sales (in units)) x average base year gross profit per u Total nos. of units sold in base year Total nos. of units sold in current year Difference Average base year G.P
35,000 34,000 1,000 Unfav 0.57 571 Unfav
Sales (in units)
xxxx
Sales (in units)
xxxx
Sales (in units) PRICE VARIANCE
xxxx xxxx
Sales Price Variance 16,000 Fav 2,000 Unfav 8,000 Fav 22,000 Fav
xxxx xxxx xxxx xxxx
E VARIANCE
Sales Volume Variance 10,000 Fav 12,000 Unfav 2,000 Unfav
Sales (in units)
xxxx
Sales (in units)
xxxx
Sales (in units) RICE VARIANCE
xxxx xxxx
Cost Price Variance 12,500 Unfav 12,500 Unfav
xxxx xxxx xxxx xxxx
VARIANCE
Cost Volume Variance 8,000 Unfav
10,500 Fav 2,500 Fav
x) x Base year G.P. Sales Mix Variance
2,229 Fav 1,400 Unfav 243 Fav 1,071 Fav
ross profit per unit
ase year gross profit per unit
Sales Price Variance: Product
Base Year Sales Rate
Current Year Sales Rate
Variance
Leather Gloves
8
10
2 Fav
Fabric Gloves
4
6
2 Fav SALES PRICE VARIANCE
Product
Base Year Units
Current Year Units
Variance
Leather Gloves
8,000
12,000
4,000 Fav
Fabric Gloves
8,000
20,000
12,000 Fav SALES VOLUME VARIANCE
Cost Price Variance: Product
Base Year Cost Rate
Current Year Cost Rate
Variance
Leather Gloves
6
9
3 Unfav
Fabric Gloves
3
5
2 Unfav Cost PRICE VARIANCE
Cost Volume Variance: Product
Base Year Units
Current Year Units
Variance
Leather Gloves
8,000
12,000
4,000 Unfav
Fabric Gloves
8,000
20,000
12,000 Unfav Cost VOLUME VARIANCE
Sales Mix Variance:
Formula (Difference b/w current year sales and current year mix at base year mix) x Base year G.P. Product
Current year Sales
Base year Mix %
Actual Qty at base yr. mix
Variance
Leather Gloves
12,000
50.00
16,000
4,000 Unfav
Fabric Gloves
20,000
50.00
16,000
4,000 Fav
32,000
100
32,000
Sales Mix Variance
Final Sales Volume Variance
Formula:
(Difference b/w Total base years and Totalcurrent sales (in units)) x average base year gross prof Total nos. of units sold in base year Total nos. of units sold in current year Difference Average base year G.P
16,000 32,000 16,000 Fav 1.5 24,000 Fav
Current Sales Price Sales (in units) Variance 12,000
24,000 Fav
20,000
40,000 Fav
RICE VARIANCE
64,000 Fav
Base year Sales Rate
Sales Volume Variance 8
32,000 Fav
4
48,000 Fav
OLUME VARIANCE
80,000 Fav
Current Cost Price Sales (in units) Variance 12,000
36,000 Unfav
20,000
40,000 Unfav
E VARIANCE
76,000 Unfav
Base year Sales Rate
UME VARIANCE
Sales Volume Variance 6
24,000 Unfav
3
36,000 Unfav 60,000 Unfav
year mix) x Base year G.P. Base year Gross Profit
Sales Mix Variance
Sales Mix Variance
2.00
8,000 Unfav
1.00
4,000 Fav 4,000 Unfav
nits)) x average base year gross profit per unit
Ex-6 M&U + Paper
Revenue Price Variance: Rate per day: = Patient service revenue / Impatient Service days (in thousand) 2003 = 12,000 / 300 days 40 per day 2004 = 13,860 / 330 days
Revenue price variance = Revenue price variance =
42 per day
(Difference b/w base year rate and current year rate) x Current year (in (Rs. 42 - Rs. 40) x 330 days 660 Fav
Revenue Volume Variance:
Revenue volume variance = (Difference b/w base year days and current year) x Base year rate (330 days - 300 days) x Rs. 40 Revenue volume variance =
1,200 Fav
Cost Price Variance: Rate per day: = Total cost of services resident staff / Impatient Service days (in thousand) 2003 = 10,000 / 300 days 33.33 per day 2004 = 11,900 / 330 days
Cost price variance =
36.06 per day
(Difference b/w base year rate and current year rate) x Current year (in (Rs. 36.06 - Rs. 33.33) x 330 days
Cost Price variance =
900.9 Unfav
Cost Volume Variance: Cost volume variance = (Difference b/w base year days and current year) x Base year rate (330 days - 300 days) x Rs. 33.33 Cost volume variance =
1,000 Unfav.
Revenue Mix Variance: Formula (Difference b/w current year sales and current year mix at base year mix) x Base year G.P. Not possible
Final Sales Volume Variance
Average base year gross profit per unit =
Formula:
Total Gross profit Total Nos. of units
2,000,000 300,000
(Difference b/w Total base years and Totalcurrent sales (in units)) x average base year gross profit per Total nos. of units sold in base year Total nos. of units sold in current year Difference Average base year G.P
300 330 -30 Fav 6.67 (200) Fav
year rate) x Current year (in days)
year rate) x Current year (in days)
x) x Base year G.P.
6.67
base year gross profit per unit
Exercise no.7 Sales Price Variance: Revenue price variance = Revenue price variance =
(Difference b/w base year rate and current year rate) x Current year (in (Rs. 3 - Rs. 2.75) x 24,000 units 6000 Unfav
Sales Volume Variance: Revenue volume variance = (Difference b/w base year days and current year) x Base year rate (25,000 - 24,000) x 3 Revenue volume variance = 3,000 Unfav Cost Price Variance: Cost price variance = Cost Price variance =
(Difference b/w base year rate and current year rate) x Current year (in (Rs. 2.38 -Rs. 2.40) x 24,000 units 480 Unfav
Cost Volume Variance: Cost volume variance = (Difference b/w base year days and current year) x Base year rate (25,000 units - 24,000 units) x 2.38 Cost volume variance = 2,380 fav
Revenue Mix Variance: Formula (Difference b/w current year sales and current year mix at base year mix) x Base year G.P. Not possible due to mix possible in single product
Final Sales Volume Variance
Average base year gross profit per unit =
Formula:
Total Gross profit Total Nos. of units
15,500 25,000
(Difference b/w Total base years and Totalcurrent sales (in units)) x average base year gross profit per Total nos. of units sold in base year Total nos. of units sold in current year Difference
25000 24000 1000 Unfav
Average base year G.P
0.62 620 Unfav
year rate) x Current year (in days)
year rate) x Current year (in days)
x) x Base year G.P.
0.62
base year gross profit per unit
1 Sales Price Variance
2 Cost Price variance
3 Sales Mix Variance
4 Final Sales volume variance
If Favourable then
"Gain due to increase in Sales price"
If Unfav. Then
"Loss due to decrease in sales price"
If Favourable then
"Gain due to decrease in cost price"
If Unfav. Then
"Loss due to increase in Cost price"
If Favourable then
"Gain due to shift in Sales mix"
If Unfav. Then
"Loss due to shift in Sales mix"
If Favourable then
" Gain due to increase in units sold"
If Unfav. Then
" Loss due to decrease in units sold"
Sales Price Variance: Formula:
Sales Price Variance
Rate means Sales rate
Product X
(Difference b/w Std. rate and Actual rate) x Actual units
Product Y
(Difference b/w Std. rate and Actual rate) x Actual units
Product Z
(Difference b/w Std. rate and Actual rate) x Actual units SALES PRICE VARIANCE
Product
Standard Rate
OR Actual Rate
Variance
Actual units
A
15
16
1 Fav
5,112
B
12
12
0
4,208
C
10
9
1 Unfav 1,105 SALES PRICE VARIANCE
Sales Volume Variance: Formula:
Sales Volume Variance
Rate means Sales rate
Product X
(Difference b/w Std. units and actual units) x Standard rate
Product Y
(Difference b/w Std. units and actual units) x Standard rate
Product Z
(Difference b/w Std. units and actual units) x Standard rate SALES VOLUME VARIANCE
Product
Std. Units
OR Actual Units
Variance
Standard Rate
A
6,000
5,112
888 Unfav
15
B
3,500
4,208
708 Fav
12
C
1,000
1,105
105 Fav SALES VOLUME VARIANCE
10.00
Cost Price Variance: Formula:
Cost Price Variance
Rate means cost rate
Product X
(Difference b/w Standard rate and Actual rate) x Actual units
Product Y
(Difference b/w Standard rate and Actual rate) x Actual units
Product Z
(Difference b/w Standard rate and Actual rate) x Actual units COST PRICE VARIANCE
Product
Standard Rate
OR Actual Rate
Variance
A
12
13.98
B
10
9.72
C
8.75
8.83
Actual Units
1.98 Unfav
5,112
0.28 Fav
4,208
0.08 Unfav. COST PRICE VARIANCE
1,105
Cost Volume Variance: Formula:
Cost Volume Variance
Rate means cost rate
Product X
(Difference b/w Standard units and Actual units) x Standard rate
Product Y
(Difference b/w Standard units and Actual units) x Standard rate
Product Z
(Difference b/w Standard units and Actual units) x Standard rate COST VOLUME VARIANCE
Product
Standard Units
OR Actual Units
Variance
A
6,000
5,112
888 Fav
B
3,500
4,208
708 Unfav
Standard Rate 12 10.00
C
1,000
1,105
105 Unfav COST VOLUME VARIANCE
8.75
If nos. of units increased (in sales) resulting increase in the cost spending
Sales Mix Variance: Formula (Difference b/w Actual units and Actual units at std. mix ) x Standard G.P. Product
Actual Unis
Std. Mix %
Actual Qty at standard mix
Variance
Standard Gross Profit
A
5,112
57.14
5,957
845 Unfav
3.00
B
4,208
33.33
3,475
733 Fav
2.00
C
1,105 10,425
9.52 100
993 10,425
112 Fav Sales Mix Variance
1.250
Final Sales Volume Variance Formula:
(Difference b/w standard units and Actual units) x average Standard gross profit per unit Average standard gross profit per unit =
Product
Actual units
Standard Units
Total Gross profit Total Nos. of units
Variance
Average Standard Gross profit per unit
A
5,112
6,000
888 Unfav
2.50
B
4,208
3,500
708 Fav
2.50
C
1,105 10,425
1,000 10,500
OR Final Sales Volume Variance:
26250 10500
105 Fav 2.50 Final Sales volume variance
Formula:
(Difference b/w Total Standard units and Total Actual units) x average Standard Gross profit per unit Total nos. of Standard units sold Total nos. of Actual units sold Difference Average base year G.P
10500 10425 75 Unfav 2.50 188 Unfav
xxxx xxxx xxxx xxxx
PRICE VARIANCE
Sales Price Variance 5,112 Fav 1,105 Unfav 4,007 Fav
xxxx xxxx xxxx xxxx
VARIANCE
Sales Volume Variance 13,320 Unfav 8,496 Fav 1,050 Fav (3,774) Unfav
xxxx xxxx xxxx xxxx
RICE VARIANCE
Cost Price Variance 10,122 Unfav 1,178 Fav 88 Unfav. 9,032 Unfav
xxxx xxxx xxxx xxxx
Sales Volume Variance 10,656 Fav 7,080 Unfav
919 Unfav 2,657 Fav
Sales Mix Variance
2,535 Unfav 1,466 Fav 140 Fav 929 Unfav
2.50
Final Sales Volume Variance 2,220 Unfav 1,770 Fav 263 Fav 188 Unfav
rd Gross profit per unit
