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Marginal costing, operating statement

Forums › ACCA Forums › ACCA MA Management Accounting Forums › Marginal costing, operating statement

  • This topic has 3 replies, 4 voices, and was last updated 9 years ago by Sabrina.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • February 22, 2012 at 3:02 pm #51585
    ellent
    Participant
    • Topics: 1
    • Replies: 0
    • ☆

    Hello,
    This is my first time on the forum.
    I am having serious trouble understanding the section on variances and operating statement – example below:

    A company uses standard marginal costing. Last month the standard contribution on actual sales was $10000 and the following variances arose.

    total variable costs variance – 2000A

    Sales price variance – 500F

    Sales volume contribution variance – 1000 A

    What was the actual contribution for last month?

    10000+500-2000=8500

    I have tried to mix and match the lines against the Operating statement in my BPP book and I am just not getting it…the wording in the example doesn’t match to the Operating statement and I do not think I am putting the lines in the correct place.
    I would be really grateful if somebody could help me with this, I have tried so hard but I am just completely stuck now.
    Thank you very much.

    March 1, 2012 at 8:31 pm #94775
    Vipin
    Member
    • Topics: 151
    • Replies: 374
    • ☆☆☆☆

    Sales price=contribution+variable costs
    so is
    sales price variance=contribution variance + variable costs variance.
    sales price fav means it is increase in value
    variable costs adv means it is increase in value

    500F=contribution variance +2000,
    contribution variance=-1500
    decrease in value indicates it is adverse
    therefore
    std contribution-1500=actual contribution
    10000-1500=actual contribution
    8500=actual contribution

    here, contribution volume variance is irrelevant info.

    August 18, 2015 at 8:23 am #267598
    Hafiz
    Member
    • Topics: 0
    • Replies: 1
    • ☆

    Excellent explanation, thanks a lot

    October 19, 2015 at 10:40 am #277435
    Sabrina
    Member
    • Topics: 1
    • Replies: 3
    • ☆

    Is the answer to that question 8,500?

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