This year’s total sales of Bulldogs Inc. is P4,600,000. The following variances are determined: · Sales Price Variance – 750,000 favorable · Cost Price Variance – 100,000 unfavorable · Sales Volume Variance – 150,000 unfavorable Using horizontal analysis, determine the percentage change from the prior year total sales to the current year total sales. A. 10% B. 15% C. 20% D. 25%
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.
This year’s total sales of Bulldogs Inc. is P4,600,000. The following variances are determined:
· Sales Price Variance – 750,000 favorable
· Cost Price Variance – 100,000 unfavorable
· Sales Volume Variance – 150,000 unfavorable
Using horizontal analysis, determine the percentage change from the prior year total sales to the current year total sales.
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