Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › SALES QUANTITY VARIANCE FROM MOC EXAM QUESTION

- This topic has 4 replies, 3 voices, and was last updated 7 years ago by John Moffat.

- AuthorPosts
- October 31, 2015 at 2:29 pm #279809
Dear John,

I got this question on a moc exam question, and I do not agree with the correct answer.

Can you tell me where I am going wrong or how to arrive at the correct answer:A company has budgeted on selling 7000 units of prod x at a sale price of $30 p.u.

and budgeted to sell 3000 units of prod y at a sale price of $40 p.u.THE STD CONTR. per unit is 30% o sale price for both products.

They actually sell 8000 units of x and 7000 units of y

What is the sales quantity variance?

– 49500 ADV

– 57000 ADV

– 57000 FAV

– 49500 FAVThe correct answer is 49500 favourable.

I GET 57000 favourable.According to me the variance is calculated by comparing actual and budget sales units. The difference between actual and budget must be cost out at 30% of the sale price.

therefore 8000 – 7000=1000x30x0.30= 9000 for x

7000 – 3000=4000x40x0.30=48000 for yAdding x and y together should give you a fav variance of 57,000

Please advise,

Yours sincerely,

Wayne v Straaten

November 5, 2015 at 5:20 pm #280691Hi Wayne,

The sales quantity variance should be as follows

(Budgeted sales-standard mix of the actual sales ) x standard cont.

I think this is your confusion ,

Thanks,

November 6, 2015 at 4:21 pm #280855Wayne:

I am sure that I have answered this question from you elsewhere.

However what Alawi Sahed has written is correct. What you have done is calculate the sales volume variance (which can be analysed into sales quantity and sales mix variance).

Alawi Sahed:

Thanks for answering, but please don’t answer in this forum because it is “Ask the Tutor” (but please do help people in the normal F9 forum).

November 7, 2015 at 7:36 am #280960Hi Mr John,

Noted ,

Thanks a lot ,

November 7, 2015 at 2:23 pm #280993No problem 🙂

- AuthorPosts

- You must be logged in to reply to this topic.