Product Cost Variance Analysis

This Web-Based, Model-Driven DSS can help managers analyze product cost variances and determine problems that may exist that require additional investigation. Enter values under Assumptions and Estimates and then click Calculate. It shows costs and profit contributions. The results are then displayed. Use this decision support tool to test different sets of assumptions and to see results change.

Assumptions and Estimates   Results
 Standard % Standard Cost Actual CostVariance
What is the selling price per unit? $   Labor Cost %   $ $ %
What is the labor rate per hour? $   Materials
%   $ $ %
What is the time spent (minutes)?   Variable
%   $ $ %
What is the cost of materials per unit? $  
What is the variable per-unit overhead rate? $   Profit Contribution $
What is the expected profit contribution? $  

Profit Contribution -- The dollar amount of the product's price that contributes to fixed overhead and pre-tax profit.

copyright (c) 2000 by D. J. Power