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Unit 8: Management Control through Variance Analysis




          Summary Performance Report, January (` 000s)                                          Notes
               Actual Profit                                     132
               Budgeted Profit                                    80

               Variance                                           52
               Analysis of Variance – Favourable/(Unfavourable)
               Revenue Variances

               Price                                             (75)
               Max                                                35
               Volume                                            115

               Net volume variance                                75
               Variable cost variances
               Material                                          (11)

               Labour                                            (12)
               Variable overhead                                  10

               Net Variable Cost Variance                        (13)
               Fixed Cost variance
               Selling expenses                                   (5)
               Admn. Expenses                                     (5)

               Net Fixed cost variance                           (10)
               Total Variance                                     52

          Self Assessment

          Fill in the blanks:

          7.   Three  types  of  standards  are  used  for  evaluating  reports  of  actual  activities:  (1)
               Predetermined standards (2) Historical standards (3) ………………….. .
          8.   A …………………..is a budget that is adjusted  for changes in the level of the cost  (or
               revenue) driver.






















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