The following information has been taken from the accounting records of Ahmed and Company in first and second period. Period Sales Profit 2019 $ 100,000 $15,000 2020 150,000 25,000 Calculate: 1) Profit volume ratio 2) Fixed cost for two periods 3) Variable cost of two periods. 4) Break Even Point in dollars sales Sales required to earn a profit of $25,000 Profit when sales are $200,000
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.
The following information has been taken from the accounting records of
Ahmed and Company in first and second period.
|
Period |
Sales |
Profit |
|
2019 |
$ 100,000 |
$15,000 |
|
2020 |
150,000 |
25,000 |
Calculate:
1) Profit volume ratio
2) Fixed cost for two periods
3) Variable cost of two periods.
4) Break Even Point in dollars sales
- Sales required to earn a profit of $25,000
- Profit when sales are $200,000
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