The comparison of actual revenue or margin amounts to either budget or prior year results will generally result in a variance. This course demonstrates mathematical formulas to compute the amount of that variance that is attributable to pricing decisions, unit volume and product mix. In the case of margin variances, the calculation for product cost is an additional component. This method is an important tool to clearly and concisely explain revenue and margin variances to marketing, operations and executive personnel. Specific topics covered are the calculation of the price, volume, mix and cost components as well as an explanation of the concept of product mix. Applicable to CPA’s working in the manufacturing or distribution industry as well as CPA’s in public accounting who serve these industries.
After reading the materials, participants will be able to:
- Identify appropriate explanations for revenue and margin variances
- Define and compute the price variance component at the revenue and margin levels
- Define and compute the volume variance component at the revenue and margin levels
- Define and compute the product mix variance component at the revenue and margin levels
- Define and compute the product cost variance component at the margin level
Joseph Helstrom has over 30 years of experience as a CPA in both public accounting and industry with extensive experience in financial reporting and analysis, treasury, tax, information technology, legal and regulatory matters and strategic planning. After graduation from Butler University with a degree in Accounting, Joe got his start at Ernst & Young and, subsequent to that, has served as Chief Financial Officer, Director of Treasury and Tax, Controller and Manager of Financial Planning, Reporting and Analysis for several different companies. Joe, along with his wife Patricia McCarthy, have published articles in Missouri and Texas CPA Society publications titled “Incorporating Excel Arrays into Your Audit Plan”.
home or office
||Joseph Helstrom, CPA
||2 Accounting CPE (For PA CPAs Only)
||Self-Study e-book with on-line test (10 exam questions)
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