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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Standard costing
Is budgeted profit based on actual units?
If so this means that we dont have to include sales volume variance while calculating actual profit? ?
The original budget profit is based on the budgeted results.
Adjusting it by the sales volume variance gives the standard profit for the actual sales (i.e. the flexed budget profit).
So this means if we are calculating actual profit we dont have to include sales volume variance in the calculation?
If you start with the budgeted profit then you do need to include the sales volume variance.
If you start with the standard profit for the actual sales, then you do not include the sales volume variance.