Sales Price Variance:

Formula: Sales Price Variance Rate means Sales rate

Product X (Difference b/w base year rate and current year rate) x Current Sales (in units)

Product Y (Difference b/w base year rate and current year rate) x Current Sales (in units)

Product Z (Difference b/w base year rate and current year rate) x Current Sales (in units)
SALES PRICE VARIANCE

OR
Product Base Year Current Year Variance Current
Sales Rate Sales Rate Sales (in units)

X 5 6.6 1.6 Fav 10,000

Y 4 3.5 0.5 Unfav 4,000

Z 2.6 3 0.4 Fav 20,000

SALES PRICE VARIANCE

Sales Volume Variance:

Formula: Sales Volume Variance

Product X (Difference b/w base year units and current year units) x Base year rate

Product Y (Difference b/w base year units and current year units) x Base year rate

Product Z (Difference b/w base year units and current year units) x Base year rate
SALES VOLUME VARIANCE

OR
Product Base Year Current Year Variance Base year
Units Units Sales Rate

X 8,000 10,000 2,000 Fav 5

Y 7,000 4,000 3,000 Unfav 4

Z 20,000 20,000 0 2.60

SALES VOLUME VARIANCE
Cost Price Variance:

Formula: Cost Price Variance Rate means cost rate

Product X (Difference b/w base year rate and current year rate) x Current Sales (in units)

Product Y (Difference b/w base year rate and current year rate) x Current Sales (in units)

Product Z (Difference b/w base year rate and current year rate) x Current Sales (in units)
COST PRICE VARIANCE

OR
Product Base Year Current Year Variance Current
Rate Rate Sales (in units)

X 4 4 0 10,000

Y 3.5 3.5 0 4,000

Z 2.175 2.80 0.625 Unfav. 20,000

COST PRICE VARIANCE

Cost Volume Variance:

Formula: Cost Volume Variance Rate means cost rate

Product X (Difference b/w base year units and current year units) x Base year rate

Product Y (Difference b/w base year units and current year units) x Base year rate

Product Z (Difference b/w base year units and current year units) x Base year rate
COST VOLUME VARIANCE

OR
Product Base Year Current Year Variance Base year
Units Units Cost Rate

X 8,000 10,000 2,000 Unfav 4

 Y 7,000 4,000 3,000 Fav 3.50

Z 20,000 20,000 0 2.18

COST VOLUME VARIANCE

If nos. of units increased (in sales) resulting increase in the cost spending

Sales Mix Variance:

Formula (Difference b/w current year sales and current year sales at base year mix) x Base year G.P.

Product Current year Base year Current year sales Variance Base year
Sales Mixing % at base yr. Mixing Gross Profit

X 10,000 0.2286 7,771 2,229 Fav 1.00

Y 4,000 0.2000 6,800 2,800 Unfav 0.50

Z 20,000 0.5714 19,429 571 Fav 0.425

34,000 1 34,000 Sales Mix Variance

Base year sales mixing ratio:

Product Base yr Base year
Sales Mixing ratio

X 8,000 0.2286

Y 7,000 0.2000

Z 20,000 0.5714
35,000 1

Final Sales Volume Variance

Formula: (Difference b/w base years and current sales (in units)) x average base year gross profit per unit

W-1 Average base year gross profit per unit = Total Gross profit
Total Nos. of units

= $ 20,000 =0.5714
35,000 units

Formula: (Difference b/w Total base years and Totalcurrent sales (in units)) x average base year gross profit per u

Total nos. of units sold in base year 35,000

Total nos. of units sold in current year 34,000
Difference 1,000 Unfav
Average base year G.P 0.5714
571 Unfav
Sales (in units) xxxx

Sales (in units) xxxx

Sales (in units) xxxx

PRICE VARIANCE xxxx

Sales Price
Variance

16,000 Fav

2,000 Unfav

8,000 Fav
22,000 Fav

xxxx

xxxx

xxxx
E VARIANCE xxxx

Sales Volume
Variance

10,000 Fav

12,000 Unfav

-
2,000 Unfav
 Sales (in units) xxxx

Sales (in units) xxxx

Sales (in units) xxxx

PRICE VARIANCE xxxx

Cost Price
Variance

12,500 Unfav
12,500 Unfav

xxxx

xxxx

xxxx
VARIANCE xxxx

Cost Volume
Variance

8,000 Unfav
 10,500 Fav

-
2,500 Fav

x) x Base year G.P.

Sales Mix
Variance

2,229 Fav

1,400 Unfav

243 Fav
1,071 Fav
ross profit per unit

ase year gross profit per unit

Sales Price Variance:

Product Base Year Current Year Variance

Sales Rate Sales Rate

Leather Gloves 8 10 2 Fav

Fabric Gloves 4 6 2 Fav

SALES PRICE VARIANCE

Product Base Year Current Year Variance

Units Units

Leather Gloves 8,000 12,000 4,000 Fav

Fabric Gloves 8,000 20,000 12,000 Fav

SALES VOLUME VARIANCE

Cost Price Variance:

Product Base Year Current Year Variance
Cost Rate Cost Rate

Leather Gloves 6 9 3 Unfav

Fabric Gloves 3 5 2 Unfav

Cost PRICE VARIANCE

Cost Volume Variance:

Product Base Year Current Year Variance

Units Units

Leather Gloves 8,000 12,000 4,000 Unfav

Fabric Gloves 8,000 20,000 12,000 Unfav

Cost VOLUME VARIANCE

Sales Mix Variance:

Formula (Difference b/w current year sales and current year mix at base year mix) x Base year G.P.

Product Current year Base year Actual Qty Variance

Sales Mix % at base yr. mix

Leather Gloves 12,000 50.00 16,000 4,000 Unfav

Fabric Gloves 20,000 50.00 16,000 4,000 Fav

32,000 100 32,000 Sales Mix Variance

Final Sales Volume Variance

Formula: (Difference b/w Total base years and Totalcurrent sales (in units)) x average base year gross prof

Total nos. of units sold in base year 16,000

Total nos. of units sold in current year 32,000
Difference 16,000 Fav
Average base year G.P 1.5
24,000 Fav
 Current Sales Price
Sales (in units) Variance

12,000 24,000 Fav

20,000 40,000 Fav

RICE VARIANCE 64,000 Fav

Base year Sales Volume

Sales Rate Variance

8 32,000 Fav

4 48,000 Fav

OLUME VARIANCE 80,000 Fav

Current Cost Price

Sales (in units) Variance

12,000 36,000 Unfav

20,000 40,000 Unfav

CE VARIANCE 76,000 Unfav

Base year Sales Volume

Sales Rate Variance

6 24,000 Unfav

3 36,000 Unfav

UME VARIANCE 60,000 Unfav

 year mix) x Base year G.P.

Base year Sales Mix

Gross Profit Variance

2.00 8,000 Unfav

1.00 4,000 Fav

Sales Mix Variance 4,000 Unfav

nits)) x average base year gross profit per unit

Ex-6 M&U + Paper

Revenue Price Variance:

Rate per day: = Patient service revenue / Impatient Service days

(in thousand)
2003 = 12,000 / 300 days 40 per day

2004 = 13,860 / 330 days 42 per day

Revenue price variance = (Difference b/w base year rate and current year rate) x Current year (in
(Rs. 42 - Rs. 40) x 330 days
Revenue price variance = 660 Fav

Revenue Volume Variance:

Revenue volume variance =

(Difference b/w base year days and current year) x Base year rate
(330 days - 300 days) x Rs. 40

Revenue volume variance = 1,200 Fav

Cost Price Variance:

Rate per day: = Total cost of services resident staff / Impatient Service days
(in thousand)
2003 = 10,000 / 300 days 33.33 per day

2004 = 11,900 / 330 days 36.06 per day

Cost price variance = (Difference b/w base year rate and current year rate) x Current year (in
(Rs. 36.06 - Rs. 33.33) x 330 days
 Cost Price variance = 900.9 Unfav

Cost Volume Variance:

Cost volume variance =

(Difference b/w base year days and current year) x Base year rate
(330 days - 300 days) x Rs. 33.33

Cost volume variance = 1,000 Unfav.

Revenue Mix Variance:

Formula (Difference b/w current year sales and current year mix at base year mix) x Base year G.P.

Not possible

Final Sales Volume Variance

Average base year gross profit per unit = Total Gross profit 2,000,000
Total Nos. of units 300,000

Formula: (Difference b/w Total base years and Totalcurrent sales (in units)) x average base year gross profit per

Total nos. of units sold in base year 300

Total nos. of units sold in current year 330
Difference -30 Fav
Average base year G.P 6.6666667
(200) Fav
year rate) x Current year (in days)

year rate) x Current year (in days)

x) x Base year G.P.

6.6666666666667

base year gross profit per unit

Exercise no.7
Sales Price Variance:

Revenue price variance = (Difference b/w base year rate and current year rate) x Current year (in
(Rs. 3 - Rs. 2.75) x 24,000 units
Revenue price variance = 6000 Unfav

Sales Volume Variance:

Revenue volume variance =

(Difference b/w base year days and current year) x Base year rate
(25,000 - 24,000) x 3
Revenue volume variance = 3,000 Unfav

Cost Price Variance:

Cost price variance = (Difference b/w base year rate and current year rate) x Current year (in
(Rs. 2.38 -Rs. 2.40) x 24,000 units
Cost Price variance = 480 Unfav

Cost Volume Variance:

Cost volume variance =
(Difference b/w base year days and current year) x Base year rate
(25,000 units - 24,000 units) x 2.38
Cost volume variance = 2,380 fav

Revenue Mix Variance:

Formula (Difference b/w current year sales and current year mix at base year mix) x Base year G.P.

Not possible due to mix possible in single product

Final Sales Volume Variance

Average base year gross profit per unit = Total Gross profit 15,500
Total Nos. of units 25,000

Formula: (Difference b/w Total base years and Totalcurrent sales (in units)) x average base year gross profit per

Total nos. of units sold in base year 25000

Total nos. of units sold in current year 24000
Difference 1000 Unfav
Average base year G.P 0.62
620 Unfav
year rate) x Current year (in days)

year rate) x Current year (in days)

x) x Base year G.P.

0.62

base year gross profit per unit

1 Sales Price Variance If Favourable then "Gain due to increase in Sales price"

If Unfav. Then "Loss due to decrease in sales price"

2 Cost Price variance If Favourable then "Gain due to decrease in cost price"

If Unfav. Then "Loss due to increase in Cost price"

3 Sales Mix Variance If Favourable then "Gain due to shift in Sales mix"

If Unfav. Then "Loss due to shift in Sales mix"

4 Final Sales volume variance If Favourable then " Gain due to increase in units sold"

If Unfav. Then " Loss due to decrease in units sold"

Sales Price Variance:

Formula: Sales Price Variance Rate means Sales rate

Product X (Difference b/w Std. rate and Actual rate) x Actual units

Product Y (Difference b/w Std. rate and Actual rate) x Actual units

Product Z (Difference b/w Std. rate and Actual rate) x Actual units
SALES PRICE VARIANCE

OR
Product Standard Actual Variance Actual
Rate Rate units

A 15 16 1 Fav 5,112

B 12 12 0 4,208

C 10 9 1 Unfav 1,105
SALES PRICE VARIANCE

Sales Volume Variance:

Formula: Sales Volume Variance Rate means Sales rate

Product X (Difference b/w Std. units and actual units) x Standard rate

Product Y (Difference b/w Std. units and actual units) x Standard rate

Product Z (Difference b/w Std. units and actual units) x Standard rate
SALES VOLUME VARIANCE

OR
Product Std. Actual Variance Standard
Units Units Rate

A 6,000 5,112 888 Unfav 15

B 3,500 4,208 708 Fav 12

C 1,000 1,105 105 Fav 10.00

SALES VOLUME VARIANCE
Cost Price Variance:

Formula: Cost Price Variance Rate means cost rate

Product X (Difference b/w Standard rate and Actual rate) x Actual units

Product Y (Difference b/w Standard rate and Actual rate) x Actual units

Product Z (Difference b/w Standard rate and Actual rate) x Actual units
COST PRICE VARIANCE

OR
Product Standard Actual Variance Actual
Rate Rate Units

A 12 13.98 1.98 Unfav 5,112

B 10 9.72 0.28 Fav 4,208

C 8.75 8.83 0.08 Unfav. 1,105

COST PRICE VARIANCE

Cost Volume Variance:

Formula: Cost Volume Variance Rate means cost rate

Product X (Difference b/w Standard units and Actual units) x Standard rate

Product Y (Difference b/w Standard units and Actual units) x Standard rate

Product Z (Difference b/w Standard units and Actual units) x Standard rate
COST VOLUME VARIANCE

OR
Product Standard Actual Variance Standard
Units Units Rate

A 6,000 5,112 888 Fav 12

B 3,500 4,208 708 Unfav 10.00

 C 1,000 1,105 105 Unfav 8.75
COST VOLUME VARIANCE

If nos. of units increased (in sales) resulting increase in the cost spending

Sales Mix Variance:

Formula (Difference b/w Actual units and Actual units at std. mix ) x Standard G.P.

Product Actual Std. Actual Qty Variance Standard

Unis Mix % at standard mix Gross Profit

A 5,112 57.14 5,957 845 Unfav 3.00

B 4,208 33.33 3,475 733 Fav 2.00

C 1,105 9.52 993 112 Fav 1.250

10,425 100 10,425 Sales Mix Variance

Final Sales Volume Variance

Formula: (Difference b/w standard units and Actual units) x average Standard gross profit per unit

Average standard gross profit per unit = Total Gross profit 26250
Total Nos. of units 10500

Product Actual units Standard Variance Average Standard

Units Gross profit per unit

A 5,112 6,000 888 Unfav 2.50

B 4,208 3,500 708 Fav 2.50

C 1,105 1,000 105 Fav 2.50

10,425 10,500 Final Sales volume variance
OR
Final Sales Volume Variance:
Formula: (Difference b/w Total Standard units and Total Actual units) x average Standard Gross profit per unit

Total nos. of Standard units sold 10500

Total nos. of Actual units sold 10425
Difference 75 Unfav
Average base year G.P 2.50
188 Unfav
 xxxx

xxxx

xxxx
PRICE VARIANCE xxxx

Sales Price
Variance

5,112 Fav

1,105 Unfav
4,007 Fav

xxxx

xxxx

xxxx
VARIANCE xxxx

Sales Volume
Variance

13,320 Unfav

8,496 Fav

1,050 Fav
(3,774) Unfav
 xxxx

xxxx

xxxx
PRICE VARIANCE xxxx

Cost Price
Variance

10,122 Unfav

1,178 Fav

88 Unfav.
9,032 Unfav

xxxx

xxxx

xxxx
xxxx

Sales Volume
Variance

10,656 Fav

7,080 Unfav
 919 Unfav
2,657 Fav

Sales Mix
Variance

2,535 Unfav

1,466 Fav

140 Fav
929 Unfav

2.50

Final Sales
Volume Variance

2,220 Unfav

1,770 Fav

263 Fav
188 Unfav
rd Gross profit per unit