Hello Sir. Help me in this question please
A Co. uses Standard Absorption Costing System, for which standard profit was $135,000 .
Sales Volume Variance $15000 Adverse
Sales Price Variance $10,500 Favourable
Total Variable Variance $7500 Adverse
What was the ACTUAL PROFIT ?
My only question is that "what will the standard profit $135,000 be considered as"
Standard Profit on Budgeted Sales or
Standard Profit on Actual Sales?
So we can adjust the variances accordingly.
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Standard Costing
It will be the standard profit on actual sales (otherwise it would have been referred to as the budgeted profit).
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