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Sir of the bpp kit in the question 14b.29
I did the question based on marginal costing operating statement.
But the question never stated budgeted contribution rather they have mentioned budgeted profit
It’s so confusing sir
Is the question wrong ?
Because I tried to reconcile the profits and unable to get an answer
The question and answer are correct (it is a past real exam question).
The budgeted contribution is 25,000 + 12,000 = 37,000.
After adjusting for the sales variances and variable cost variances, the actual contribution was 37,000 – 1,000 + 2,000 – 4,000 = 34,000
The actual fixed overheads were 12,000 + 500 = 12,500.
Therefore the actual profit is 34,000 – 12,500 = $21,500.
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