Page 392 - F2 - MA Integrated Workbook STUDENT 2018-19
P. 392

Chapter 15





                            Operating statements




               Variances are often summarised in an operating statement. The statement allows for
               budgeted values to be reconciled with actual values.


               If the statement starts with budgeted profit (absorption costing) or possibly budgeted
               contribution (marginal costing) then:

                    Add the favourable variances as they increase profit/contribution


                    Subtract the adverse variance as they decrease profit/contribution.





                   Test your understanding 11





                   The budgeted contribution for last month was $43,900 but the following
                   variances arose

                   Variance                                     $

                   Sales price                           3,100 A

                   Sales volume contribution             1,100 A


                   Material price                        1,986 F

                   Material usage                        2,200 F

                   Labour rate                           1,090 A

                   Labour efficiency                       512 A


                   Variable overhead expenditure         1,216 F

                   Variable overhead efficiency            465 A

                   The actual contribution for last month was $












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