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Hi john sir, kindly look at this and guide me.
Budgeted sales were 200 units every month. At the end of month 7, actual sales for the year to date were 1250 units. A revised forecast prepared at the end of month 7 indicated that actual sales for the year in total were likely to be 2000 units.
Applying the concept of feed forward control, what sales volume variance should be reported at the end of month?
a. 150 units adverse
b. 250 units adverse
c. 400 units adverse
d. 550 units adverseJohn sir i know the concept of feedforward and feed back but could not solve this one. guide me
The original budget was 12 x 200 = 2400 units.
The revised forecast is 2000 units.
So the sales volume variance (under feedforward control) will be 2400 – 2000 = 400 units adverse.
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