ACCA MA · Chapter 13 · Question 5 of 10
Budgeted sales were 5,000 units and actual sales were 4,800 units. The standard selling price is $28, standard contribution is $10 per unit, and standard profit is $6 per unit. In a standard marginal costing system, what is the sales volume variance?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) $2,000 adverse
Explanation
Under marginal costing, the sales volume variance is valued at standard contribution per unit: (4,800 - 5,000) x 10 = $2,000 adverse. Under absorption costing it would be valued at standard profit: 200 x 6 = $1,200 adverse.
More Overhead and sales variances and operating statements MCQs
- Q7Which variance appears in a standard absorption costing operating statement but NOT in a standard marginal costing operating statement?
- Q8A company has a favourable sales price variance and an adverse sales volume variance. Which of the following is the most likely explanation?
- Q9The fixed overhead expenditure variance was $2,000 favourable, and actual fixed overheads were $58,000. Budgeted output was 12,000 units…
- Q10Which of the following is the most likely cause of an adverse labour rate variance?
- Q1Budgeted fixed production overheads were $120,000, and actual fixed production overheads were $126,500. What is the fixed overhead…