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Dear Sir,
BPP Practice Kit question 137 says that: To reconcile an original budgeted profit to actual profit with variances there must be a sales volume variance.
My question is: Must we always have a sales volume variance, what for example if budgeted production/sales is 200/150 and actual production/sales is 150/150, in this case we might only have selling price and cost variances, but we will not have sales volume variance, am I right?
Thank you for your help.
There will not be a sales volume variance if the actual sales are equal to the budgeted sales.
(I cannot look at the question you refer to because Q137 in the current edition of the BPP Kit is nothing to do with variances.)
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