Option 1: Variance (Essay)

Option 1: Variance
Students Name
Institutional Affiliation
Abstract
The paper addresses the concept of variance as a performance measurement index in a particular laboratory. Particularly, the paper concentrates on finding the product mix variance and the price variance given the financial data of the company. Throughout the calculations, it is evident that there exists a difference between the expected costs and the actual costs of the company. For this reason, it is essential to determine the variation therein. In the cases scenario, there are various changes in the company’s actual costs compared to the planned expense and thus bringing about the price variance and product mix variance. For instance, the changes in the product mix such as the cost of lab testing led to the realization of the – $275, 000 product mix variance. Similarly, the fluctuations of the business discounts in the budgeted and the actual values brought about the – $25, 000 price variance. The negative value indicates that the laboratory reports an adverse performance since the actual performance in the revenues was below the target performance.
Keywords: Product mix variance, Price Variance, Budgeted, Actual

Option 1: Variance
What was the product mix variance experienced by the laboratory service? Explain your answer.
The product mix variance will be given by;
Actual Gross Contribution-Budgeted Gross Contribution (Berkowitz, 2010).
The table below gives the actual and the budgeted…