1. Calculate the Expected Rate, Standard Deviation, Variance and Coefficient of variation and decide which of the following company is better for investment. Possible outcomes Probability Rate of Return Company G Company H Bullish Trend 0.25 2096 3296 Normal Trend 0.45 396 5%6 Bearish Trend 0.3 -696 -696
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Calculate the Expected Rate, Standard Deviation, Variance and coefficient of variance.
Then decide which of the following company is better for investment.
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