ACCA PM · Guided practice (Show me how)
Chapter 14: More variance analysis
Sales mix and quantity - which units were sold, not just how many
Olga plc sells three products - A, B and C. The following table shows the budget and actual results for these products:
| A | B | C | |
|---|---|---|---|
| Budget: | |||
| Sales (units) | 200 | 100 | 100 |
| Price (p.u.) | $20 | $25 | $30 |
| Cost (p.u.) | $17 | $21 | $24 |
| Actual: | |||
| Sales (units) | 180 | 150 | 170 |
| Price (p.u.) | $22 | $22 | $26 |
| Cost (p.u.) | $16 | $18 | $25 |
Calculate the total sales margin variance, and analyse it into the sales price variance, the sales mix variance and the sales quantity variance.
As in the notes, use STANDARD costs throughout: cost variances are calculated separately in the usual way. Sign convention: favourable = positive, adverse = negative.
(a) The total sales margin variance
Calculate Olga plc's budgeted profit, actual profit at standard costs and total sales margin variance for the period.
(b) Price, mix and quantity
Calculate Olga plc's sales price, mix and quantity variances for the period.
Opening this exercise…