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Dear Sir,
How to know when to use weighted average contribution method / or unit contribution.
As sales quantity variance we calculate just like material yield variance.
i did 5800-5000 (actual-budgeted) 800 (f) x 8 cont = 6400 F
2700-3000 = 4200 A
1800-2000 = 3200 AAnswer 1000 (A)
but they took weighted average ? i am confused
For the quantity variance we do not compare actual sales with budget sales.
We compare the actual total sales mixed in the same proportions as the budget, with the budget sales.The mix variance compares with actual sales, with the actual total sales mixed in the same proportions as the budget.
This is explained (with an example) in my free lectures on sales variances.
The lectures are a complete free course for Paper F5 and cover everything needed to be able to pass the exam well.
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