Variance analysis (Memorise):

 Fixed overhead total variance is the difference between fixed overhead

incurred and fixed overhead absorbed.

 Where a company sells several different products that have different profit
margins, the sales volume variance can be divided into a sales quantity
(sometimes called a sales yield variance) and sales mix variance.

 Fixed overhead volume variance is the difference between actual and

budgeted (planned) volume multiplied by the standard absorption rate per
unit.

 Sales price variance is the difference between actual units should have sold
and actual units did sell.

 Variable overhead total variance is the difference between actual units

should have cost and the actual units did not.

 Flexed budget is prepared to show the revenues, costs and profits that
should have been expected from the actual level of production and sales.

 Flexible budget is prepared at the planning stage (according to marginal

costing principals) based on different levels of activity. This budget also
shows sales revenue and costs at different levels of activity.

 Breakeven or cost-volume-profit (CVP) analysis concerns the relationship

between sales volume, cost and profit.
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