The analyzing of the various reasons for a decease or increase in gross profit is related (same) to the calculation of standard cost variances, while gross profit analysis is often possible exclusive of budgets or standard costs. Here, I'll recommend to check out change in gross profit reasons too.
In such scenario, expenses/costs and prices of the earlier
year, or several years chooses as the basis for the similarity, serve as the
basis for the computations of the variances. When budgetary techniques and
standard costs are in use, though, a larger degree of precision and more useful
results are accomplished. Why GP analysis? Click here to see important uses of Gross profit analysis.
