Page 244 - P1 Integrated Workbook STUDENT 2018

Chapter 12

Example 2

Calculate the sales volume variance for Jayco using:

 standard contribution

 standard profit

 revenue.

Solution

Actual sales volume 1,100
Budgeted sales volume 1,000
––––––
Sales volume variance (units) 100
––––––
Standard contribution per unit $42
––––––
Sales volume variance $4,200
––––––
This is expressed as a favourable variance (increased sales volume) of
$4,200.

If standard profit is used the variance is = 100 units × $30 = $3,000

If standard revenue is used the variance is = 100 units × $120 = $12,000

240