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Dear Mr John,
Standard information is relevant:
Selling price : $50
Direct material : $ 4
direct labour :$16
Fixed production overhead : $5
Variable production overhead : $10
Fixed selling costs :$1
Variable selling cost : $1
Total Cost : $37Budget sales unit : 3000
Actual sales :3500What was the sales volume variance using marginal costing?My answer is $10000 (F)
Q2)What is the sales volume profit variance? my answer is $1000(A)
Budget selling price : $15/unit
Budget sales units :10000units
Budget profit per unit : $5/unit
actual sales revenue : $151,500
actual unit sold: 9800 unitsQ3) Boh Leow Ltd produces & sell a product, has a profit /volume ratio of 30%.Fixed cost amount to $120,000 each year. The sales revenue required each year to break even 😕
A. $156000
B.$171428
C.$400000
D. Cannot calculated from the data supplied.My answer is D
Thanks
Q1: Your answer of $10,000 (F) is correct
Q2: For breakeven, the total contribution must be equal to the fixed costs and so must be $120,000.
The PV ratio (more likely called the CS ratio in the exam) is Contribution / sales.
So, for breakeven, total contribution = $120,000, so total sales revenue = $120,000 / 30% = $400,000 (C)Many Thanks !!
But Mr John, Please advise Q2. i think you overlook this question 🙂Q2)What is the sales volume profit variance? my answer is $1000(A)
Budget selling price : $15/unit
Budget sales units :10000units
Budget profit per unit : $5/unit
actual sales revenue : $151,500
actual unit sold: 9800 units
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