ROI, RI, EVA. Performance Auto Company operates a new car division (that sells high- performance sports cars) and a performance parts division (that sells performance-improvement parts for family cars). Some division financial measures for 2017 are as follows: Home Page Layout Data Formulas Insert New Car Division Performance Parts Division 2 Total assets 3 Current liabilities 4 Operating income 5 Required rate of retun $33,000,000 $ 6,600,000 $ 2,475,000 12% $28,500,000 $ 8,400,000 $ 2,565,000 12%
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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