Variance

The variances analyse the difference between the budget contribution and the actual contribution - except for the fixed overhead variance which is irrlevant when looking at the contributions. You know that the difference between the budget and actual contribution is $10,000. This is the total of the sales volume, sales price, and variable cost variances. You know what the sales volume and sales price variances are, and so the variable cost variance is the missing figure. The same applies to all questions of this type, but if instead of telling you the contributions they told you the budget and actual profits then the fixed overhead variance would also be part of the calculation. Have you watched my free lectures on variances? The lectures are a complete free course for Paper MA and cover everything needed to be able to pass the exam well.