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9609 · 5.5.2

Variances

9609 AS - favourable and adverse variances, calculation, causes, and management responses.

Need to know

What you need to know

  • **Revenue A:** lower volume, price cuts, competition, poor marketing.
  • **Revenue F:** strong demand, successful promotion, new market.
  • **Cost A:** inflation, waste, inefficiency, quality problems, overtime.
  • **Cost F:** productivity gains, cheaper suppliers, economies of scale.

Explanation

Variances

  1. **Revenue A:** lower volume, price cuts, competition, poor marketing.
  2. **Revenue F:** strong demand, successful promotion, new market.
  3. **Cost A:** inflation, waste, inefficiency, quality problems, overtime.
  4. **Cost F:** productivity gains, cheaper suppliers, economies of scale.
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