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What Is The Importance Of Disposition Of Variance?
This is an important topic for accounting students. If you want full clarity on this topic and wish to score better grades then availing Disposition of Variances Assignment Help is the perfect choice. You will notice that your problem solving ability has improved and knowledge has expanded after getting our services.
The significance of this topic is discussed in following points-
- Variance means that the actual results are different from the planned outcomes. The management looks behind the reasons for occurring of such variances and thus corrective measures are taken to sort out the issue.
- There are various ways of disposition of variances like in the case of cost of sales and the associated work in progress is evaluated on the basis of standard costing. So if any variances arise then it can be shifted to P&L account.
- There can also be a method for disposition of price variance like allocating the variance amongst the cost of sales, the work in progress and the final stock related to finished goods.
- If there is quantity variance then one can write it off with P&L account.
- Management can also consider a different method of carrying the variances to the subsequent financial year by creating a reserve account for it and thus it can be set off in future years.
- There can also be a case where the unfavorable and the favorable variances will be cancelling each other and thus will ultimately get disposed off.
- These methods are related to cost accountancy and to have a firm grip on them students are advised to seek professional help.
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