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Sale price variance

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Sale price variance

  • This topic has 1 reply, 2 voices, and was last updated 11 months ago by John Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • July 18, 2021 at 11:44 am #628167
    sadafwaheed1
    • Topics: 79
    • Replies: 29
    • ☆☆

    “Bloom is proud to announce that it has managed to maintain its market share despite an overall increase in the market size by 10%.” However, the sales director when challenged, by this journalist recently admitted having been forced to reduce prices by $1.50 per bunch on average on a budget volume of 12,000 bunches. All is not as rosy as it seems in Bloom’s garden!
    If the standard variable cost of a bloom bunch of flowers is $20 and the standard contribution gained is $5 what is the favourable sales volume variance

    Sir in this question I didn’t understand how they got 13200 as the actual units sold

    July 18, 2021 at 3:42 pm #628205
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 49583
    • ☆☆☆☆☆

    They had budgeted on selling 12,000 bunches. However the size of the market has increased by 10% and since they have maintained their market share (i.e. the same % of the overall market) then they will have sold 10% more as well.

    12,000 + (10% x 12,000) = 13,200

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