Price Variance

	Price Variance Price variance (Vmp) is a term used in cost accounting which denotes the difference between the expected cost of an item (standard cost) and the actual cost at the time of purchase. The price of an item is often affected by the quantity of items ordered, and this is taken into consideration. A price variance means that actual costs may exceed the budgeted cost, which is generally not desirable. This is important when companies are deciding what quantities of an item to purchase. Formula Price variance is calculated by the following formula: :Vmp = (Actual unit cost - Standard unit cost) * Actual Quantity Purchased :or :Vmp = (Actual Quantity Purchased * Actual Unit Cost) - (Actual Quantity Purchased * Standard Unit Cost). When the Actual Materials Price is higher than the Standard Materials Price, the variance is said to be unfavorable, since the Actual price paid on materials purchased is greater than the allowed standard. The variance is said to be favorable when the Standar ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu]
	Cost Accounting Cost accounting is defined as "a systematic set of procedures for recording and reporting measurements of the cost of manufacturing goods and performing services in the aggregate and in detail. It includes methods for recognizing, classifying, allocating, aggregating and reporting such costs and comparing them with standard costs." (IMA) Often considered a subset of managerial accounting, its end goal is to advise the management on how to optimize business practices and processes based on cost efficiency and capability. Cost accounting provides the detailed cost information that management needs to control current operations and plan for the future. Cost accounting information is also commonly used in financial accounting, but its primary function is for use by managers to facilitate their decision-making. Origins of Cost Accounting All types of businesses, whether manufacturing, trading or producing services, require cost accounting to track their activities. Cost accounting ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu]
	Unit Cost The unit cost is the price A price is the (usually not negative) quantity of payment or compensation given by one party to another in return for goods or services. In some situations, the price of production has a different name. If the product is a "good" in t ... incurred by a company to produce, store and sell one unit of a particular product. Unit costs include all fixed costs and all variable costs involved in production. Cost unit is a form of measurement of volume of production or service. Cost unit vs unit cost Cost unit is the standard unit for buying the minimum of any product. Unit cost is the minimum cost for buying any standard unit. References {{Business-term-stub Costs ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu]
picture info	Variance In probability theory and statistics, variance is the expectation of the squared deviation of a random variable from its population mean or sample mean. Variance is a measure of dispersion, meaning it is a measure of how far a set of numbers is spread out from their average value. Variance has a central role in statistics, where some ideas that use it include descriptive statistics, statistical inference, hypothesis testing, goodness of fit, and Monte Carlo sampling. Variance is an important tool in the sciences, where statistical analysis of data is common. The variance is the square of the standard deviation, the second central moment of a distribution, and the covariance of the random variable with itself, and it is often represented by \sigma^2, s^2, \operatorname(X), V(X), or \mathbb(X). An advantage of variance as a measure of dispersion is that it is more amenable to algebraic manipulation than other measures of dispersion such as the expected absolute deviatio ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu]
picture info	Money Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context. The primary functions which distinguish money are as a medium of exchange, a unit of account, a store of value and sometimes, a standard of deferred payment. Money was historically an emergent market phenomenon that possess intrinsic value as a commodity; nearly all contemporary money systems are based on unbacked fiat money without use value. Its value is consequently derived by social convention, having been declared by a government or regulatory entity to be legal tender; that is, it must be accepted as a form of payment within the boundaries of the country, for "all debts, public and private", in the case of the United States dollar. Contexts which erode public confidence, such as the circulation of counterfeit money or domestic hyperinflation, can cause good money to l ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu]