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variance - sales volume contribution variance

MSMolly Sum11y ago
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
John MoffatJohn MoffatTutor11y ago#1
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)
MSMolly Sum11y ago#2
hi sir, I know that was wrong to mention 200 units as budget units appreciate for the informed and thank you
John MoffatJohn MoffatTutor11y ago#3
You are welcome :-)
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