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John Moffat.
John Moffat.-
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xyzc
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A company manufactures and sells three products. Budgeted and actual results for the period just ended were as follows.
Product Budgeted sales (units) Budgeted profit per unit Actual sales units Actual profit
x 800 10 700 8
y 1000 6 1200 6
z 600 12 350 16
What was the adverse sales quantity variance?
I calculated the sales quantity variance to be 2800 adverse but this is incorrect. Where have I went wrong. I calculated the variance by comparing the budgeted sales at budgeted profit per unit with the actual sales at budgeted profit per unit. So is my approach incorrect.
John Moffat
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Yes, your approach is incorrect.
For the sales quantity variance we compare actual total sales at standard mix with the budgeted sales, in both cases costing at the standard profit per unit.
This is all explained in my free lectures on sales mix variances.
xyzc
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