The comparison of actual revenue or margin amounts to either budget or prior year results will generally result in a variance. This course demonstrates mathematical formulas to compute the amount of that variance that is attributable to pricing decisions, unit volume and product mix. In the case of margin variances, the calculation for product cost is an additional component. This method is an important tool to clearly and concisely explain revenue and margin variances to marketing, operations and executive personnel. Specific topics covered are the calculation of the price, volume, mix and cost components as well as an explanation of the concept of product mix. Applicable to CPA’s working in the manufacturing or distribution industry as well as CPA’s in public accounting who serve these industries.
Course Publication Date: June 15, 2016
This course is available with NO ADDITIONAL FEE
if you have an active self study membership
or can be purchased for $10.00
|Author:||Mill Creek Publishing
|Delivery Method:||Self Study
|Level of Knowledge:||Overview
|Recommended Field of Study:||Accounting
- Develop an overall understanding of revenue and margin analysis.
- Identify and calculate the price variance component at the revenue and margin levels.
- Identify and calculate the volume variance component at the revenue and margin levels.
- Recognize the importance of product mix.
- Identify and calculate the product mix variance component at the revenue and margin levels.
- Identify and calculate the product cost variance component at the margin level.
- Compare revenue and margins to budgeted and prior year results using price, volume, mix, cost formats.