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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › planning and operational variance
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.
We always use the actual sales volume when calculating sales price variances (whether it is a planning and operation variance problem or not).