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Profit Variance

Profit variance is a metric that measures the difference between a company's actual profits and its expected or budgeted profits. It's calculated by taking the actual profit (or loss) and subtracting the budgeted profit (or loss). If the result is positive, it means that the company has exceeded its profit targets, and if it's negative, it means the company has fallen short of its targets.

Profit variance is a useful metric for companies because it helps them identify areas where they're underperforming or overperforming. It can also help them adjust their budgets and strategies to better meet their goals. Profit variance can be broken down into different components, such as sales volume variance, price variance, and cost variance, to help identify the specific drivers of the variance.

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