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Dear Sir,
I have the following 2 questions.
1. In BPP,I could see that almost in every answer the Sales variances(not sales contribution variances) have been calculated by using Contribution(SP-VC) instead of SP.Why is it so? Is there any concept like that? we can find using SP?Pls let me know if I am conceptually wrong.2. What can be used to draw the graph(Pen or Pencil)?
Regards,
Balaji1. Sales volume variances are always calculated using standard contribution (assuming we are using marginal costing). It is because the variances are there to explain why the actual total contribution is different from the budgeted total contribution.
Watching my free lectures on basic variances will help to make it clear.
2. All of your answers must be in black ink (including any graphs).
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