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- This topic has 3 replies, 2 voices, and was last updated 2 years ago by John Moffat.
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- August 23, 2022 at 2:25 pm #664058
A company uses a standard absorption costing system. The following figures are available for the last
accounting period in which actual profit was $108,000.
$
Sales volume profit variance 6,000 adverse
Sales price variance 5,000 favourable
Total variable cost variance 7,000 adverse
Fixed cost expenditure variance 3,000 favourable
Fixed cost volume variance 2,000 adverseWhat was the standard profit for actual sales in the last accounting period?
I wonder why in this case “Sales volume profit variance” is irrelevant?
thanks in advance
August 23, 2022 at 6:04 pm #664082Because the question asks for the standard profit for the actual sales.
The sales volume variance is the difference between the budgeted profit and the standard profit for the actual sales.
August 27, 2022 at 9:41 am #664399thanks
August 27, 2022 at 10:33 am #664412You are welcome.
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