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Here’s a question:
A company uses standard marginal costing. Last month the standard contribution on actual sales was $44000 and the following variances arose:
Total variable costs variance $6500 A
Sales price variance $2000F
Sales volume contribution variance $4500AWhat was actual contribution of last month?
Sir in this question am not able to fathom as to why sales volume contribution variance is not being deducted from $44000?
The volume variance is the difference between the standard contribution on actual sales and the standard contribution on the budgeted sales.
It is irrelevant here because the $44,000 is the standard contribution on the actual sales (not the contribution on budgeted sales).
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