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Sorry posted this in the wrong forum at first:
Firstly, for those that don’t know there is some missing part on that question which you can get from the BPP erata page here:
https://www.bpp.com/learning-media/about/students
In this question, it gives us a price per unit for sales of $260, a materials cost of $144 p.u and a labour cost of $52 pu
For Sales Volume Variance they have calculated the standard profit as $260-144, ignoring the cost of labour. The question mentions nothing about labour being a fixed cost as far as I can see.
Should we not include labour in the cost of sales when calculationg contribution/profit for Sales Volume variance?
I do not have the BPP Study Text (only the BPP Revision Kit) and so I cannot help you without seeing the full question. Certainly I would expect the contribution to be after subtracting the labour cost as well.
(Profit is after deducting all costs, including fixed costs. Contribution is after deducting variable costs. Contribution and profit are not the same thing!)
Have you watched my free lectures on this? The lectures are a complete free course for Paper F5 and cover everything needed to be able to pass the exam well.
If you are watching the lectures then you do not really need a Study Text. Far more important is that you have bought a Revision Kit, which contains lots of exam standard questions to practice, and practice on these questions it vital to passing the exam.
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