I am looking at a report consist of fixed and variable costs according to department. I am to supposed to analyze the costs variance for each department but I am a little stuck here. I have the full figures in $, input of raw materials in MT and produced output in MT.
I work this out in excel. Actual and budgeted figures given. I am doing the following can anyone clarify this?
1. I should not analyze the variable cost in $ because actual and budgeted output is different. Comparing this does not give me an actual variance. Therefore I have to divide the figure with produced output before I compare this. I include the percentage of variance between actual and budget to ease the analyzing part.
2 For fixed cost, I will analyze looking at the variance in $. Because fixed costs are incurred even though there is no production. So no point dividing this with the produced output. I just use actuals minus budget to see the variance. Or should I divide this too???
What if I want to standardize the unit of measurement? How do I clean up this report? Anyone can help me please? Thank you.
I work this out in excel. Actual and budgeted figures given. I am doing the following can anyone clarify this?
1. I should not analyze the variable cost in $ because actual and budgeted output is different. Comparing this does not give me an actual variance. Therefore I have to divide the figure with produced output before I compare this. I include the percentage of variance between actual and budget to ease the analyzing part.
2 For fixed cost, I will analyze looking at the variance in $. Because fixed costs are incurred even though there is no production. So no point dividing this with the produced output. I just use actuals minus budget to see the variance. Or should I divide this too???
What if I want to standardize the unit of measurement? How do I clean up this report? Anyone can help me please? Thank you.
