- This topic has 3 replies, 2 voices, and was last updated 7 years ago by .
Viewing 4 posts - 1 through 4 (of 4 total)
Viewing 4 posts - 1 through 4 (of 4 total)
- The topic ‘variance analysis’ is closed to new replies.
Interactive BPP books for September 2026 exams, recommended by OpenTuition.
Get discount code >>
Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › variance analysis
W Ltd uses a standard marginal costing system. The following data relates to one of its products.
selling price: $ 27/unit
variable cost:$12/unit
fixed cost :$9/unit
profit :$6/unit
Budgeted sales for control period 7 were 2400 units, but actual sales were 2550 units.The revenue earned from these sales were $67320.
Profit reconciliation statements are drawn up using marginal costing system. Whar sales variance would be included in such a statement for period 7?
A. price variance: $1530(A) volume variance: $900(F)
B. price variance: $1530(A) volume variance:$2250(F)
C. price variance: $1530(A) volume variance: $2250(A)
D. price variance: $1530(F) volume variance : $2250(F)
The correct answer is B
I have been able to calculate volume variance by (2550-2400) x (27-12)= $2250(F)
however I did not been able to calculate price variance
I would be grateful if you can help me sir.
The actual sales at standard selling price = 2,550 x $27 = 68,850.
The actual sales at actual selling price = $67,320
Therefore the sales price variance is 68850 – 67320 = $1,530 adverse
I do suggest that you watch my free lectures on this. The lectures are a complete free course and cover everything needed to be able to pass the exam well.
Thank you, sIr for your precious explanation.
You are welcome 🙂
