Pilot Paper – P5 – Planning Variance & Operational Variance – Problem Number 2

My understanding of Planning Variance is difference between Original Budget and Revised Budget and which is beyond control of assess ( Shop Manager in the Example) and Operational Variance is difference between Revised Budget and Actual Performance.

Accordingly Planning Variance in the problem would be
Original Budget – Revised Budget – Planning Variance

Sales 266,000 234,080 (31920)
Cost of Sales 60% – (106,400) (93,632) 12,768
Gross Profit 159,600 140,448 (19,152)

Now Operational Variance would be
Revised Budget Actual Performance – Operational Variance
Sales 234,080 237,100 3020 Favorable
Cost of Sales (93,632) (94,840)
Gross Profit 140,448 142,260 1,812 Favorable

Kindly advise whether above understanding is correct.

Deep