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Variances – fixed budget profit

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Variances – fixed budget profit

  • This topic has 1 reply, 2 voices, and was last updated 6 years ago by John Moffat.
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  • December 7, 2015 at 5:37 pm #288658
    sandhyabarbie6
    Member
    • Topics: 4
    • Replies: 4
    • ☆

    Good evening 🙂
    Can you please help me with this question?a brief explanation will do. i want to do it on my own but in kaplan textbook am having confusion..the questions are different ! 🙁 Please

    Here goes :
    A company has recorded the following variances for a period :
    Sales variance volume $10,000 adverse
    Sales price variance $5,000 favourable
    Total cost variance $12,000 adverse
    Standard profit on actual sales for the period was $120,000.
    What was the fixed budget profit for the period?
    >$110,000
    >$130,000
    >$103,000
    >$137,000
    correct answer is : $130,000
    Thanks

    November 8, 2018 at 8:00 am #484157
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54709
    • ☆☆☆☆☆

    The question asks for the budget profit. Given that the difference between the standard profit on actual sales and the budget profit is the sales volume variance, the budget profit must be 120,000 + 10,000 = 130,000

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