# F5 Jun’08 Q1(b)

This topic contains 4 replies, has 3 voices, and was last updated by  John Moffat 1 year, 3 months ago. This post has been viewed 5 times

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• #54005

sarahlim
Participant

to calculate the the variance of sales price
we should use the actual sales price – actual sales unit @ standard cost right?
According to the question the sales price for flexed budget is \$2016000
and the actual sales price is 1800000 so the variance should be 216000(A)
But the answer is like this: Sales price: (225 – 240)8,000 = 120,000 Adv
Hmmm….I am really confuse now and need help urgently!

#104000

pavanpavanmehta
Participant

For calculation of sales price variance you have to calculate for actual production.
So actual price-standard price(actual production)
225-240(8000)
In a flexed budget the figure is 2016000 are for a standard production.
So you have to calculate for actual production to get sales price variance.

#104001

John Moffat
Keymaster

For sales price variance you use actual sales units (not production, although in this question the sales = the production).

Actual sales at actual selling price = 1800000 (from the question)

Actual sales at standard selling price = 8000 tonnes x \$240 (per tonne) = 1920000

So sales price variance = 1920000 – 1800000 = 120000 (adverse)

#104002

sarahlim
Participant

Ooo… i thought the actual sales is 8400 tonne
TQ very much

#104005

John Moffat
Keymaster

You are welcome

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