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variance – sales volume contribution variance

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › variance – sales volume contribution variance

  • This topic has 3 replies, 2 voices, and was last updated 10 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
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  • February 22, 2015 at 12:54 pm #229617
    Molly Sum
    Participant
    • Topics: 39
    • Replies: 53
    • ☆☆

    A company operates a standard marginal costing system. Last month the company sold 200 units more than it planned to sell. The following data relate to last month:

    selling price per unit – standard – $40 and actual $38
    Variable cost per unit – standard – $30 and actual $29

    What was the favourable sales volume contribution variance last month ?

    A.$1600 B.$1800 C.$2000 D.$2200 ( answer given is C)

    My working :
    Budget 200 units x $10 =$2,000 my answer is c.
    (selling price : standard $40 – variable cost per unit $30= $10 standard profit for marginal cost) , $10 profit for standard marginal cost whether is correct ?

    and the question did not give actual unit therefore my working directly used the budget unit multiplied by the standard profit marginal cost per unit whether is correct ?

    thank you

    February 22, 2015 at 2:19 pm #229628
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    The correct answer is C.

    (Your workings are correct, except that you did did not use budget units – you used 200 units which is the difference between the actual units and the budget units)

    February 23, 2015 at 11:46 am #229794
    Molly Sum
    Participant
    • Topics: 39
    • Replies: 53
    • ☆☆

    hi sir, I know that was wrong to mention 200 units as budget units
    appreciate for the informed and thank you

    February 23, 2015 at 3:32 pm #229813
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    You are welcome 🙂

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