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planning and operational variance

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › planning and operational variance

  • This topic has 1 reply, 2 voices, and was last updated 7 years ago by AvatarJohn Moffat.
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  • February 13, 2019 at 10:29 pm #505044
    Avatarreem1589
    Participant
    • Topics: 61
    • Replies: 17
    • ☆☆

    Elm Co is a company which operates in Sealand. Elm Co budgeted to sell 25,000 units of a new product during the year. The budgeted sales price was $8 per unit, and the variable cost $4 per unit. Actual sales during the year were 22,000 units and variable costs of sales were $88,000. Sales revenue was only $9 per unit. With the benefit of hindsight, it is realised that the budgeted sales price of $8 was too low, and a price of $10 per unit would have been much more realistic.
    Calculate the favourable sales price planning variance.
    the answer to the following question is 44000 f

    My question is that what should the figure for the revised standard sales volume be.

    February 14, 2019 at 7:44 am #505078
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54839
    • ☆☆☆☆☆

    We always use the actual sales volume when calculating sales price variances (whether it is a planning and operation variance problem or not).

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