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Can you help me to understand this, please?
After checking all the variances, using absorption costing we got:
Sales Volume 2800 F
Sales Price 16800 A
Mat Expenditure 3867 A
Mat Usage 612 F
Labour Rate 2485 F
Labour Idle time 6500 A
Labour Efficiency 2000 F
Var O/H Expenditure 852 F
Var O/H Volume 800 F
Fixed O/H 574 AThey add up to $18,192 A
I think it should be equal to $20992 A.
Am I missing something?
I just came across to a different exercise that explained to me the question above.
When I add the volume variances it brings me to the profit on the fixed budget 😉
Yes 🙂
20,992 (A) is the total of the variances when compared with the flexed budget. The flexed budget is different from the original budget due to the sales volume variance, which is 2,800 (F).
(By the way, I must check two things with you. You do realise I hope that the answers to all of the examples are at the back of the course notes. Also, I do hope you are using the lectures and the course notes together – the course notes are not meant to be a study text (they are lecture notes) and you do need to use the lectures with them.)
Thank you!!!
I did watch all the lectures but it’s so many subjects that my head mixes everything up and I am going back to the chapters while doing the exercises. For this exercise I was trying to do them again by myself because when we do watching the class we don’t really think it through, just “copy”. I’m revising in work so can’t watch the class again here 😉
Thank you again for all your help.. I still can’t believe this is all for free.. it’s heaven!
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