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July 24, 2020 at 5:05 pm
Hello, The sales variance I learnt had two parts 1. Sales Value variances (5 variances) Analysed using selling price per unit. 2. Sales Margin Variances (5 variances) analysed using Contribution/ profit for MC or AC respectively.. But here you taught that sales price variance is solved using SP and other variances using Contribution/ Profit. I want to know if the variances you taught in this lecture are the only ones gonna come in the exam and if we are asked to find out Total Sales margin variance what should we use selling price or contribution/profit and which 2 variances put together will give us total sales margin variance ? Thank you so much.
John Moffat says
July 24, 2020 at 7:38 pm
My lectures cover everything that can be asked in the exam.
The syllabus makes no reference to ‘sales margin’ variances. Instead they are referred to as ‘sales volume variance’ which is the total of the ‘sales mix’ and ‘sales quantity’ variances, as I explain in my lectures. These variances use the standard contribution or standard profit (depending on whether it is absorption or marginal costing).
March 25, 2020 at 2:27 pm
I was confused, for the sales volume variance, how do you determine whether to use standard profit or actual profit?
Thanks in advance.
March 25, 2020 at 2:48 pm
For the volume variance we always use standard profit (or contribution if marginal costing).
May 18, 2019 at 4:40 pm
John, I was just confused, why in Quantity variance, we compared standard mix with Budgeted mix instead actual Mix ?
May 19, 2019 at 11:16 am
Because we are separating out the effect of a change in the total quantity and a change in the mix – so we look at the effect of each of them on their own.
May 21, 2019 at 4:10 pm
May 21, 2019 at 4:43 pm
You are welcome 🙂
April 27, 2019 at 9:37 pm
November 8, 2018 at 7:18 am
Thanks John. Great lecture. The sales volume variance can be split into sales mix and sales quantity variance.
October 4, 2018 at 7:56 am
thank you so much sir
October 4, 2018 at 4:28 pm
October 3, 2018 at 7:59 pm
Sir, are sales price variance and sales volume variance together called sales margin variance?
October 3, 2018 at 8:14 pm
or is it just the sales price variance? thank you
October 4, 2018 at 7:19 am
Just the sales price variance 🙂
April 26, 2019 at 12:18 pm
Thanks for the good work John.?
I don’t quite understand your response to Jareerabedin’s question. Are you saying that the total sales margin variance is the same as the sales price variance? If so, why are they then separated in the question??
I had thought it is: = 180*(6-3) + 150*(4-4) + 170*(1-6) = 540 + 0 + (850) = 310 (Adverse).
April 26, 2019 at 2:57 pm
Sorry but I don’t understand my response either!! (It was six months ago and I must have misunderstood the question)
You are correct – it is the total variance.
April 27, 2019 at 4:18 pm
Ow, thanks a lot for the clarity.
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