CIMA BA2 · Chapter 7 · Question 13 of 14
A standard costing operating statement starts with budgeted profit of $84,000. The variances for the period are: sales volume $6,000 adverse, sales price $4,500 favourable, total materials $3,200 adverse, total labour $1,800 favourable, fixed overhead expenditure $2,500 adverse. What is the actual profit?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) $78,600
Explanation
Actual profit = budgeted profit - adverse variances + favourable variances = $84,000 - $6,000 + $4,500 - $3,200 + $1,800 - $2,500 = $78,600.
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