Variances Variances can be either: * Positive/favourable (better than expected) or * Adverse/unfavourable ( worse than expected) A favourable variance might mean that: * Costs were lower than expected in the budget‚ or * Revenue/profits were higher than expected By contrast‚ an adverse variance might arise because: * Costs were higher than expected * Revenue/profits were lower than expected What causes budget variance? There are four key reasons and it is important that
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Cost Variance Analysis Presented by : Edmund C. Cabrera MBA Student Universidad de Manila Definitions STANDARD COSTS – are predetermined or target unit costs of production which should be attained under efficient conditions. It is the amount and costs of direct material‚ direct labor‚ and factory overhead required to produce one unit of finished product. STANDARD COST SYSTEM – is an accounting system which uses standard costs rather than actual costs to account for units as they flow through
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True False 7. A cost variance is the difference between actual cost and standard cost. True False 8. A budget performance report that includes variances can have variances caused by both price differences and quantity differences. True False 9. A cost variance equals the sum of the quantity variance and the price variance. True False 10. When computing a price variance‚ the price is held constant. True False 11. Within the same budget performance report‚ it is impossible
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ROI and Variance Analysis ROI and Variance Analysis What are the four major budgets of a health care organization? Briefly discuss each. Describe the four types of responsibility centers‚ including the characteristics of each? The revenue center represents the organizational link in which the activity is appreciated. The cost center represents the organizational link in which products/ services are obtained which generate expenses (costs) with the help of which there can be measured the efficiency
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father of “Modern Portfolio theory”‚ developed the mean-variance analysis‚ which focuses on creating portfolios of assets that minimizes the variance of returns i.e. risk‚ given a level of desired return‚ or maximizes the returns given a level of risk tolerance. This theory aids the process of portfolio construction by providing a quantitative take on it. It integrates the field of quantitative analysis with portfolio management. Mean variance analysis has found wide applications both inside and outside
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BUDGET MANAGEMENT ANALYSIS To have a basis in illustrating the analysis of variance or difference between budgeted and actual figures‚ the budget of a sampled (unknown) company was utilized (http://www.smallbusinessnotes.com/business-finances/budgeting-systems.html). | | | | | | | | |
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FINANCIAL MANAGEMENT DEVELOPMENT Management Reporting Budgetary Control NO 213 BUDGETARY CONTROL AND VARIANCE ANALYSIS £ £££ ££££££ 1 333 35753 FINANCIAL MANAGEMENT DEVELOPMENT ONE OF A SERIES OF GUIDES FOR FINANCIAL MANAGEMENT DEVELOPMENT FROM www.FinancialManagementDevelopment.com This is one of a series of documents produced by David A Palmer as a guide for managers on specific financial topics to assist informed discussion. Readers should take appropriate advice before acting
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JET2 Financial Analysis Task 2 TABLE OF CONTENTS Introduction 3 undefined depreciation 4 Supply chain Distribution costs 4-5 Executive and Administrative compensation 5-6 utility Expenses 6 sales projections 7 flexible budget 7-8 Favorable and Unfavorable Variance Analysis 8 master budget 9-12 management by EXCEPTION 13-15 References 16 Introduction For a business to grow and survive in today ’s dynamic environment where profit margins are squeezed and businesses
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Running head: Budget Development Analysis Budget Development Analysis University of Phoenix Education Finance and Budgeting/EDA 538 Dr. Pamela Wilkins March 21‚ 2009 Budget Development Analysis The budget of a school is potentially the most important step in the daily operation of a school district. Every decision that is made affects staff‚ students‚ programs‚ services and daily operations at the core of the school environment. Every decision can affect the success or failure
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Chapter 7 Operating budgets: bridging planning and control solutions Review Questions 1. A plan for using limited resources. 2. Firms budget for (1) planning‚ (2) coordination‚ and (3) control (performance evaluation and feedback). 3. Operating budgets reflect the collective expression of numerous short-term decisions that conform to the direction set by long-term plans. Financial budgets quantify the outcomes of operating budgets in summary financial statements.
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