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A company uses standard marginal costing. Last month when all sales were at the standard price, the standard contribution from actual sales was $50,000 and the following variances arose:
$
Total variable costs variance
3,500
Adv
Total fixed costs variance
1,000
Fav
Sales volume contribution variance
2,000
FavWhat was the actual contribution for last month?
The actual contribution is 50000 – 3500 = 46500.
The fixed cost variance is not relevant because we are only looking at the contribution.
The sales volume variance is not relevant because we are starting with the ;standard contribution from actual sales’ (not from budgeted sales).
Dear Mr. John, thank you very much for your prompt response, i read your response as soon as i received it but couldn’t update a response straight away!
Well! i just wanted to say thank you for all your brilliant lectures and teaching methods its absolutely awesome! I’m glad to say that i have now passed F2, and i did pass F1 & F3 last year and i have been using all your lectures and notes throughout for the preparation.
Unfortunately, i attempted F5 in the June session and failed 🙁 however i believe that i will pass it next time i.e DEC’ 14′ . I was thinking of doing F7 with F5 is that a good combination if not please advice. Since F4 is now CBE i thought of leaving it until after December.
Regards Shalini
Hi Shalini
Congratulations (and thank you for your comments) 🙂
Your idea of leaving F4 until after December is sensible , and yes – F5 and F7 is a fine combination.
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