Variance

seek in Business and Economics Journal

Sales and end product Volume Variances in Standard Costing
John Parkinson York University, Toronto, Canada Abstract: In this paper we discuss the choice of a numeraire for the calculation of the gross gross sales lot variance. The sales volume variance seeks to report the transaction of the actual sales volume being different from the budgeted sales volume. If different numeraires are possible, then different values for the sales volume variance will exist for a granted deviation between planned and actual sales levels. We let out from the explicit or implicit materials in various super C cost accounting textbooks that at least three numeraires are in evidence of call. These are: sales revenue; parcel margin and replete(p)-cost margin. The objective of this paper is to compare the effects of victimization the different numeraires. We also discuss the interrelationship between sales volume variances and production volume variances as two of the numeraires lean to the account of the production volume variance while the use of the contribution margin as a numeraire leads to a authority where the production volume variance cannot exist. In order to gild these concepts in an accessible form we present a fortune study.



The case study demonstrates the results that are obtained when three different managers, individually using a different numeraire, report on the results of a company where sales volume has missed the budget by a substantial amount. Given the strategic importance of fashioning realistic sales forecasts and achieving sales targets, then this issue of reporting the effect of deviations from targets is of major importance. Keywords: Production volume variances; Sales volume variances; Standard costing variances.

Sales and Production Volume, Page 1

Research in Business and Economics Journal

Introduction Sales-related variances are circumstantial to the management of any organization. It is difficult to imagine any laterality area where there is...If you want to get a full essay, order it on our website: Ordercustompaper.com



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