A company produces 3 products with the following budget information available: A B C Sales GH₵14 GH₵15 GH₵18 Standard full cost GH₵10 GH₵10 GH₵13 Budget Production 10,000 units 13,000 units 9,000 units The actual sales price and production were: A B C Sales price GH₵14.5 GH₵15.15 GH₵19.00 Budget production 9,500units 3,500units 8,500units You are required to calculate: The sales price variance, sales volume profit variance. iii. The sales mix variance profit, sales quantity profit volume variance
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
A company produces 3 products with the following budget information available:
A B C
Sales GH₵14 GH₵15 GH₵18
Budget Production 10,000 units 13,000 units 9,000 units
The actual sales price and production were:
A B C
Sales price GH₵14.5 GH₵15.15 GH₵19.00
Budget production 9,500units 3,500units 8,500units
You are required to calculate:
- The sales price variance, sales volume profit variance.
iii. The sales mix variance profit, sales quantity profit volume variance.
Step by step
Solved in 2 steps
