- This topic has 3 replies, 2 voices, and was last updated 7 years ago by
.
- Posts
The company uses a system of costing for marginal costs. The following data are available for the deviations for the period:
For material costs of $ 300 Adverse
For labor costs $ 800 Favorable
On an overhead charge of $ 550 Adverse
At a sales price of $ 400 Favorable
By volume of sales $ 800 Favorable
If the actual profit was $ 30,000 in profits budgeted?Please don’t simply ask test questions and expect an answer. You must have an answer in the same book in which you found the question – you should ask about whatever it is in the answer that you are not clear about and then I will help you.
You know what the actual profit is. You know that for material there is an adverse variance of 300, and so the budgeted profit must have been 300 more than the actual profit. You apply the same logic to all of the variances.
Have you watched my free lectures on this? The lectures are a complete free course for Paper F2 and cover everything needed to be able to pass the exam well.
Excuse me, please, that this is not the correct way to put it. Then I got 30 000- (800 + 400 + 800-300-550) = 28850. Is it correct? If it is correct why is this taken into account sales price variance?
- The topic ‘Variance Analysis’ is closed to new replies.