- This topic has 3 replies, 2 voices, and was last updated 6 years ago by
.
- Posts
Bloom Limited was the subject of the following press story:
Yellow sells two types of squash ball, the type A and the type B. The standard contribution from these balls is $4 and $5 respectively and the standard profit per ball is $1.50 and $2.40 respectively. The budget was to sell 5 type A balls for every 3 type B balls.
Actual sales were up 20,000 at 240,000 balss with type A balls being 200,000 of that total. Yellow values its stock of balls at standard marginal cost.
What is the value of the favourable sales quantity variance?
The answer given in the kit is $87,500.
The solution is as following:Total actual sales: 240,000
Total budget sales: 220,000
Difference: 20,000
Average standard contribution: $4.375
Favourable variance: $87,500The only thing I can’t understand – how to figure out total budget sales?
Could you please explain this?The actual sales of 240,000 were 20,000 up on budget. Therefore the total budget sales were 20,000 less than budget and were 220,000 🙂
- The topic ‘Need help with Kaplan Exam Kit Question No.143 (Sales Quantity Variance)’ is closed to new replies.