The following income statement data presented by VGP Company for the years ended December 31, 2020 and 2021: 2020 2021 Net Sales 600,000 699,600 Cost of Sales 360,000 380,160
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.
Compute for the following and indicate if its FAVORABLE or UNFAVORABLE
Format: 11,111 F or 11,111 U
- Price variance=
- Price-Quantity variance=
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