Page 135 - BA2 Integrated Workbook STUDENT 2018

Standard costing and variance analysis

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 units 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.

Illustrations and further practice

Now try TYU 5

Go over illustration 3 then try TYU 6

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