Consider the following data for three divisions of a company, X, Y, and Z: Divisional: X Y Z Sales $ 1,339,000 $ 974,000 $ 4,617,000 Operating Income 196,400 111,500 290,100 Investment in assets 469,200 497,200 3,606,700 The return on investment (ROI) for Division X is:
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.
Consider the following data for three divisions of a company, X, Y, and Z:
| Divisional: | X | Y | Z | ||||||
| Sales | $ | 1,339,000 | $ | 974,000 | $ | 4,617,000 | |||
| Operating Income | 196,400 | 111,500 | 290,100 | ||||||
| Investment in assets | 469,200 | 497,200 | 3,606,700 | ||||||
The
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