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W14-15 BSC
W14-15 BSC
and
Strategic Profitability Analysis
The cost effect of growth measures how much costs would have changed
in the prior year if production would have been at current year levels.
This is done separately for Variable and Fixed costs.
Cost
Effect Actual Units of Actual Units Prior
Of capacity in of Capacity Period
Growth = Prior Period to in the X Price
For Produce Current Prior per unit
Fixed Period Output Period of
Costs capacity
($22 per unit current year - $23 per unit prior year) X 1,150,000 actual
units of output sold in current year = $1,150,000 Unfavorable
Cost
Effect Actual Units of
Of Current Period Prior Period Capacity on
Price- = Price per Unit Price per Unit X Prior Period to
Recovery of Capacity of Capacity Produce
for Fixed Current
Costs Period’s Output
Cost
Actual Actual Units of
Effect
Units of Capacity in Prior Price Per Unit of
Of
= Capacity in Period to X Capacity in
Productivity
Current Produce Current Current Period
for Fixed
Period Period’s Output
Costs