sales volume expressed in physical units;
price;
cost price of one unit of goods.
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Let's consider situations that lead to changes in profit and determine how much it changes under the influence of each factor. When calculating, first the planned factor indicators are successively replaced by their deviations, and then by their actual value. Each situation that affects profit will have its own calculation formula.
Situation 1. Impact of sales volume on profit:
ΔPRvolume = ΔVprod × (Cplan – Sunit plan) = (Vprod. fact – Vprod. plan) × (Cplan – Sunit plan).
Situation 2. Impact of selling price on profit:
ΔPRprice = Vproduct fact × ΔC = Vproduct fact × (Cfact – Cplan).
Situation 3. Impact of unit cost on profit:
ΔPRSed = Vprod. fact × (–ΔSed) = Vprod. fact × (–(Sed. fact – Sed. plan)).
Method of chain substitutions
In this case, the influence of each factor is considered mexico number for whatsapp sequentially, while the others remain unchanged. The basis is the same mathematical formula of the factor analysis model of sales profit.
Method of chain substitutions
Source: shutterstock.com
Let's determine the influence of factors on the amount of profit.
Situation 1. Change in sales volume.
PR1 = Vprod. fact × (Cplan – Sed.plan);
ΔPRvolume = PR1 – PRplan.
Situation 2. Change in selling price.
PR2 = Vprod. fact × (Cfact – Sed. plan);
ΔPRprice = PR2 – PR1.
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Situation 3. Change in the cost price of a unit of goods.
PRSed = Vprod. fact × (Cfact – Sed. fact);
ΔPRSed = PR3 – PR2.
The following symbols are used in these formulas:
PRplan - planned profit from sales;
PR1 — profit generated under the influence of the factor of change in sales volume (situation one);
PR2 - profit generated under the influence of the price change factor (situation two);
PR3 - profit generated under the influence of the factor of change in the cost of selling a unit of goods (situation three);
ΔPRvolume is the amount of deviation in profit when the sales volume changes;
ΔPRprice is the amount of deviation in profit when the price changes;
ΔПSed — the amount of deviation in profit when the cost of a unit of goods sold changes;
ΔVprod — the difference between the actual and base sales volume;
ΔЦ — the difference between the actual and base sales cost;
ΔSed — the difference between the actual and base cost of a unit of goods sold;
Vprod. fact — actual sales volume;
Vprod. plan — planned sales volume;
Цплан — planned price;
Cfact - actual price;
Sed. plan — planned cost of one unit of goods sold;
Sed. fact — the actual cost of one unit of goods sold.
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The results obtained by the chain substitution method coincide with the results obtained by the absolute difference method.
Method of chain substitutions
Source: shutterstock.com
The total deviation of profit is equal to the sum of the deviations arising under the influence of all the factors for which the factor analysis is carried out.