ExpertEasy2 marksMultiple Choice
ACCA · Question 28 · Standard Costing
Section A
AutoParts Manufacturing budgeted to sell 10,000 units at a standard profit of $12 per unit. Actual sales were 11,500 units. What is the sales volume profit variance?
Section A
AutoParts Manufacturing budgeted to sell 10,000 units at a standard profit of $12 per unit. Actual sales were 11,500 units. What is the sales volume profit variance?
Answer options:
A.
$18,000 Adverse
B.
$18,000 Favorable
C.
$138,000 Favorable
D.
$120,000 Favorable
How to approach this question
Find the difference between actual sales volume and budgeted sales volume. Multiply by the standard profit per unit.
Full Answer
B.$18,000 Favorable✓ Correct
Sales Volume Profit Variance measures the impact of selling a different quantity than budgeted. Difference in volume = 11,500 - 10,000 = 1,500 units. 1,500 units * $12 standard profit = $18,000 Favorable.
Common mistakes
Using standard revenue instead of standard profit, or getting the sign wrong.
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