Page 118 - BA2 Integrated Workbook - Student 2017
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Chapter 7
Sales volume contribution variance
The sales volume contribution variance reveals the contribution difference which is
caused by selling a different quantity from that budgeted.
Actual sales volume 2,100
Budgeted sales volume 2,000
———
Variance in hours 100 favourable
———
× standard rate contribution (650 – 590) 60
Sales volume contribution variance $6,000 favourable
———
Total sales variance = $15,000 adverse + $6,000 favourable = $9,000 adverse.
Note: In all the cost variance calculations we saw that the budgeted volume was
irrelevant. However, the budgeted sales volume is used in the sales volume variance.
TYU 5
Go over illustration 2 then try TYU 6
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