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Is there any difference when calculating sales mix price variance and just sale mix variance ???
There is no such thing as ‘sales mix price variance’.
There is a sales price variance, a sales mix variance, and a sales quantity variance.I do suggest that you watch my free lectures on this. The lectures are a complete free course for Paper F5 and cover everything needed to be able to pass the exam well.
I mean sales mix profit variance and sales mix and sales quantity price variance . Although , whatever the answer is now will be too late as I have already wrote the exams today .
The first question today was my question to you that could fetch me 20 whole marks .
I did sales mix profit variance and sales quantity price variance as you treated in the note but there were other costs such advertisement costs and fixed costs to both products units .
Actual sales mix * std price with actual sales mix @ std mix value @ budgeted price
And multiplied results with std profit.
For sales qty : actual sales at actual mix and budgeted sales and then multiplied the result with the standard price . Although when I used weighted average std profit , I could not get same result. So I guess. Other costs factor caused it … advert cost … deducted contribution from fixed cost to give me std profit.We were asked to explain sales mix profit variance and sales qty profit variance and why the business should this variances . I hope to pass the exam.
Could differential, opportunity and replacement cost be considered as relevant costs?
Did you include advertising cost and rent & depreciation cost when calculating the standard profit?
I cannot comment a question in the exam until I have seen the whole question, and it has not yet been published by the ACCA.
Normally, the standard cost will only include production costs – so rent of the factory and depreciation of factory machines would be included, but advertising costs would not be.
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