Respond to classmate discussion post

Respond to classmate discussion question.  A good paragraph will do with a question , and add reference:


Option 1 – Discuss a current business activity that you or your department does that could be improved by leveraging variance analysis. Discuss the perspective you could gain, and what a “favorable price” and a “favorable quantity” variance mean in this application.


My credit union is a co-operative financial institution and its main business activity is trading in money.  We serve our members by accepting deposits (savings) and granting credit (loans) with a view to making a profit.  Since revenue minus expenses equals profit, it stands to reason that leveraging variance analysis of the factors that affect either revenue or expenses will impact favorably or unfavorably on profit.


Revenue variancefor an accounting period is the difference between budgeted and actual revenue. A favorable revenue variance occurs when actual revenues exceed budgeted revenues, while the opposite is true for an unfavorable variance. Revenue variance results from the differences between budgeted and actual selling prices, volumes or a combination of the two.


Expense variancefor an accounting period is the difference between budgeted and actual expenses. A favorable expense variance occurs when actual expenses is lower than budgeted expenses, while the opposite is true for an unfavorable variance. Expense variance results from the differences between budgeted and actual cost of producing the service, which includes the cost of money and overheads.


How can leveraging variance analysis be applied to revenue and expenses to improve profits?  In this application, revenue improves when either ‘price’ or ‘volume’ of loans is adjusted. In the case of lending, ‘price’ equals interest rate, and ‘volume’ equals number of loans


Revenue will improve under the two conditions (assuming that there is no default in loan repayment).


  1. If interest rate increases i.e. ‘favorable price” and volume remains constant.
  2. If volume increases i.e. “favorable quantity” and interest remains constant.


It is assumed that if the cost of originating and managing the loan is constant, an increase in interest rate and or volume/quantity will increase profits.


Where interest rate on savings or cost of funds used to finance the loan (interest expense) can be reduced, (with all overhead costs remaining constant), the result will be even greater profits.


The concept of leveraging variance analysis can be applied to a single loan category (e.g. auto loans) or different loan categories (e.g. mortgage, business or personal loans).

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Get 15% OFF on your FIRST order. Use the coupon code: new15