Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Sales Volume Variance
- This topic has 1 reply, 2 voices, and was last updated 10 months ago by John Moffat.
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- January 7, 2024 at 8:22 am #697792
Good day
I am attempting the following question.A company is reviewing actual performance to budget to see where there are differences. The following standard information is relevant:
$
per unit
Selling price 50
––
Direct materials 4
Direct labour 16
Fixed production overheads 5
Variable production overheads 10
Fixed selling costs 1
Variable selling cost 1
––
Total costs 37
––
Budgeted sales units 3,000
Actual sales units 3,500
What was the favorable sales volume variance using marginal costing?I am unsure if the standard contribution per unit is $20 or $19 ($19 will include the variable selling cost in my calculation of contribution per unit).
Do I include the Variable selling cost in my calculation or do I focus on the Variable Production costs only?
January 7, 2024 at 4:58 pm #697812The contribution is after charging all variable costs and so in this example is $19
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