Price, Volume, And Risk Variances Research Paper

Length: 2 pages Sources: 2 Subject: Disease Type: Research Paper Paper: #95703619 Related Topics: Cost Accounting, Risk
Excerpt from Research Paper :

Price, Volume, And Risk Variances Analysis

The first step in the computation of revenue is to calculate volume, and price variances:

Number of patients receiving flu shots =1200

Charge per flu shot =$

Number of flu patients=1400

Charge per patient =$

Formula to calculate the projected revenue Total Revenue is as follows:

= "Number of total patients receiving flu shots * total charge per flu shot) + (Number of total flu patients * total charge per patient)"

= (1200 x 55) + (1400 x 70)

= 66,000 + 98,000

Total Revenue = $164,000.

The next step is to calculate the projected revenue as revealed as follows:

Projected Revenue:

Estimated total number of flu shots =400

Estimated total charge per flu shot =$

Estimated number of flu patients = 1,600

Estimated charge per patient = $

Formula to calculate the projected revenue is as follows:

(Estimated total number of flu shots * estimated total charge per flu shot) + (estimated total number of flu patients * estimated total charge per patient).

Projected Revenue= (400 x 50) + (1600 x 80)

Projected Revenue= (20,000 + 128,000)

Projected Revenue= $148,000.


In other words, the concept of variance is connected with actual and planned results. However, variance is categorized based on the outcome of the computed variance. When the actual budget results are greater than the expected results, the company records a favorable variance. However, when the expected budgeted results are better than the actual results, the company record unfavorable variance.

In essence, variance analysis is the management accounting tool to control or evaluate the performances of budgeted amount, product cost or price of goods and services. Variance analysis can also be used to evaluate the company costs and revenues. Moreover, variance analysis can be used to evaluate the difference…

Sources Used in Documents:


Larson, K.D. (2004).Fundamental Accounting Principles. Sixteenth Edition. McGraw-Hill, 2004.

Ott, E.R. & Schilling, E.G. (1990). Process Quality Control -- Troubleshooting and Interpretation of Data, 2nd Edition, McGraw-Hill.

Cite this Document:

"Price Volume And Risk Variances" (2015, June 08) Retrieved January 23, 2022, from

"Price Volume And Risk Variances" 08 June 2015. Web.23 January. 2022. <>

"Price Volume And Risk Variances", 08 June 2015, Accessed.23 January. 2022,

Related Documents
Risk, Return and Their Evaluation Risk &
Words: 1454 Length: 4 Pages Topic: Economics Paper #: 68660864

Risk, Return and Their Evaluation Risk & Performance Indicators Since this is a small business, therefore raising equity capital through public stock issue is less likely than debt or whatever form of paper issued to angel or venture investors. Therefore while a larger, publicly traded firm would consider the return on equity version of the short form DuPont equation, a small, more closely-held concern would focus on return on assets (ROA). If

Risks in Export Market There Is Need
Words: 2999 Length: 10 Pages Topic: Economics Paper #: 15394285

Risks in Export Market There is need for companies to develop a professional approach before venturing into the exporting business. The management of the company is supposed to be committed extremely as well as devoting time and money in commencing the campaigns of export. A company is supposed to be ready to face greater competition as well as more stringent rules and regulations concerning products and packaging due to the variance

How Risk, Return and Valuation Correlate
Words: 2526 Length: 9 Pages Topic: Economics Paper #: 64066071

Corporate Finance Valuation, risk and return are closely linked, from different perspectives. Primarily, risk determines, to some degree, the level of returns, while both need to be seriously considered when conduction a valuation. In many occasions, the analysts work with information from the present, creating forecasts about risk and return that allows them to give, with a reasonable probability, expectations about future events. This paper aims to look into more details at

Economic Modelling and Exchange Risk Exposure
Words: 5805 Length: 16 Pages Topic: Economics Paper #: 641239

Econometric Modeling Financial risk is currently at the center of all economic activity due to the incredibly unstable financial environment of the world economy. As a consequence the search for ways to reduce risk has taken a front seat in the important issues of our day. Several instruments exist in order to increase risk reduction possibilities, these include forward and futures contracts as well as various derivatives. That the most optimal

Credit Risk in Banking in Agreement With the Basel Accords
Words: 13816 Length: 50 Pages Topic: Economics Paper #: 65664414

Credit Risk Management Banks are an important part of the economy of any nation. Traditionally, the banks operate as financial intermediaries serving to satisfy the demand of people in need of various forms of financing. Through this, banks enable people to purchase home and businesses to expand. These financial institutions therefore facilitate investment and spending that are responsible for fueling the growth of the economy. In spite of their vital role

Capital Requirement and Risk Behavior Arab African
Words: 12698 Length: 40 Pages Topic: Economics Paper #: 45533113

Capital Requirement and Risk Behavior Arab African International Bank Midan ElSaray El Koubra, Garden City Caoro The research will mainly dwell on the capital requirements and risk behavior of banks, more in particular the credit risk. The purpose of this research is to identify and analyze the relationship between capital requirements and the risk behavior of banks in Egypt more in particular the Arab African International Bank, which is the case study for this