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.
What is profitablilty analysis ? Why do companies analyze profits? What is Analysis? Is this necessary to analyze profits?
Profitability analysis refers to allocation of expenses & analyzing the profits or earnings of the company. The main aim of any organization would be to make profits. The excess of income over expenses of the company is its profits & analyzing this would help to know whether the company is making profits or not & this is profitability analysis.
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