ACCA PM · Chapter 12 · Question 7 of 12
Mu Co sells products G and H. Budgeted sales were 3,000 units of G and 2,000 units of H. Standard contribution is $10 per unit for G and $20 per unit for H. Actual sales were 3,600 units of G and 1,900 units of H. What is the total sales quantity contribution variance?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) $7,000 favourable
Explanation
Weighted average standard contribution per unit = ((3,000 x $10) + (2,000 x $20)) / 5,000 = $14. Quantity variance = (5,500 - 5,000) x $14 = $7,000 favourable. Check: mix $3,000 A + quantity $7,000 F = total sales volume variance $4,000 F.
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