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Sales Volume Variance

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 2 years ago by John Moffat.
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  • Author
    Posts
  • January 7, 2024 at 8:22 am #697792
    CKAlibocas
    Participant
    • Topics: 3
    • Replies: 0
    • ☆

    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 #697812
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54821
    • ☆☆☆☆☆

    The contribution is after charging all variable costs and so in this example is $19

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