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- This topic has 3 replies, 2 voices, and was last updated 5 years ago by John Moffat.
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- October 16, 2019 at 6:01 pm #549794
Good Day Sir!
Please explain the solution of this question of variance.
https://specimen.accaglobal.com/Assignments/MA_MTQ/ACCA.htmlThank you
October 17, 2019 at 8:13 am #549843The use absorption costing, because fixed overheads are included in the cost card.
The actual selling price was higher than standard because the sales price variance is favourable.
The actually sold 1,200 less than budgeted, because the sales volume variance is adverse and 60,000/50 = 1,200
The standard sales revenue for the actual sales is 150/50 x 540,000 = 1,620,000. The sales price variance is 20,000 favourable, so the actual sales revenue = 1,620,000 + 20,000 = 1,640,000.
The production is 100 units less than budget because the fixed overhead volume variance is 2,000 adverse, and 2,000/20 = 100.
For materials, they paid less than standard price because the materials price variance is favourable.
The used 320kg more than the flexed budget because the usage variance is adverse, and 8,000/25 = 320.October 18, 2019 at 5:15 pm #550120Thank you so much Sir!
October 19, 2019 at 9:54 am #550156You are welcome 🙂
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