variance

I will answer you this time, but in future you must not simply set test questions in this forum. You must have an answer in the same book in which you found the question, and so you should say what problem you have with the answer and I will help you. The sales volume variance is not relevant because you are given the standard contribution for the actual sales (not for the budgeted sales). So the actual contribution is 10,000 + 500 - 2,000 = 8,500 Do watch my free lectures - they are a complete course for Paper F2 and cover everything needed to be able to pass the exam well.

thanku sir. my question is why price variance is added.

Because it is favourable. A favourable variance means that the actual contribution is higher. Again, you really should watch my free lectures on variances.

Sir, I want to assure that any one who asked question here certainly watch your free lectures. We asked when we see what we do not know or understand . I do certainly watch your lectures. Your free lecture you talked about, some times i feel like asking questions as I do the listening but unfortunately I forgot I am not physically there to ask you immediately my issues on that particular topic. Take for instance your differences in arriving at sales volume variance both in marginal and Absorption costing are totally amazing.. using both costings we have extra 400 units as favorable but monetary figures are differs say bcos of fixed O/H held in inventory ( or inventory valuation). Notice that You used profit per unit $7 to arrive at $2800 while $22 at contribution p.u to arrive at $8800 respectively . But remember that the first was based on profit after all costs and the $8800 at contrI. P.u without fixed O/H . This some times can confuse any student who have no good knowledge or a slow learner like me.Infant I have no basic account foundation. So I greatly appeal that you should take easy or slow down and not get angry with us when questions are asked. I for one , have not be given a satisfactory answer since I have been asking questions on ASK THE TUTORS. We(I) do really appreciate your great assistance and lectures here because we know it is never easy to teach. Ordinary MA2 .. I made 48% the first time and it was so disappointing and I got mad because only 1 correct answer could have given me a pass mark. Once again I do honestly love your lectures.They are fantastic

Firstly it is not true that anyone asking a question here has certainly watched the lectures - you may have done, but most people asking have not watched them! Otherwise thank you for your comments :-)