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    Variance Analysis Formula

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    Toulouse18
    This document presents formulas for calculating different components of variance in net margin calculations. It breaks down net margin variance into volume variance, margin variance, and marketing expense variance. Volume variance is further broken down into demand variance and share variance. Margin variance is broken down into price variance and cost variance.

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    Variance Analysis Formula

    Uploaded by

    Toulouse18
    8 views1 page
    This document presents formulas for calculating different components of variance in net margin calculations. It breaks down net margin variance into volume variance, margin variance, and marketing expense variance. Volume variance is further broken down into demand variance and share variance. Margin variance is broken down into price variance and cost variance.

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    Variance Analysis Formula

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    This document presents formulas for calculating different components of variance in net margin calculations. It breaks down net margin variance into volume variance, margin variance, and marketing expense variance. Volume variance is further broken down into demand variance and share variance. Margin variance is broken down into price variance and cost variance.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    8 views1 page

    Variance Analysis Formula

    Uploaded by

    Toulouse18
    This document presents formulas for calculating different components of variance in net margin calculations. It breaks down net margin variance into volume variance, margin variance, and marketing expense variance. Volume variance is further broken down into demand variance and share variance. Margin variance is broken down into price variance and cost variance.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    of 1

    NMC Variance:

    NMCa-NMCp
    = [(Va*Ma)-MEa] - [(Vp*Mp)-MEp]
    = VaMa- VpMp-(MEa-MEp)
    = VaMa-VaMp+VaMp-VpMp-(MEa-MEp)
    = Mp(Va-Vp) + Va(Ma-Mp) - (MEa-MEp)
    Volume Variance Margin Variance Marketing Exp.
    Variance

    Volume Variance:
    Mp(Va-Vp)
    = Mp(MSa*MDa - MSp*MDp)
    = Mp (MSpMDa -MSpMDp + MDaMSa-MDaMSp)
    = Mp(MSpMDa-MSpMDp) + Mp(MDaMSa-MDaMSp)
    = [Mp*MSp(MDa-MDp)]+[Mp*MDa(MSa-MSp)]
    Demand Variance Share Variance

    Margin Variance:
    Va(Ma-Mp)
    = Va[(Pa-Ca)-(Pp-Cp)]
    = Va[(Pa-Pp)+(Cp-Ca)]
    = Va(Pa-Pp)+Va(Cp-Ca)
    Price Variance Cost Variance

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