The sale performance of a business can be summarized as follows Actual BudgetUnits produced and sold 11,200 10,500Selling price per unit (£) £28 £25Standard cost per unit (£) £14 £15 What was the selling price variance?£ 18,800 favourable£ 33,600 favourable£ 56,400 favourable£ 80,000 favourable What was the sales volume variance?£16,900 adverse£7,000 favourable£6,500 favourable£8,400 adverse

Variance analysis seems to be a quantitative examination of the difference between actual and…

Answered: The sale performance of a business can…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The sale performance of a business can be summarized as follows

Actual Budget

Units produced and sold 11,200 10,500

Selling price per unit (£) £28 £25

Standard cost per unit (£) £14 £15

What was the selling price variance?
£ 18,800 favourable
£ 33,600 favourable
£ 56,400 favourable
£ 80,000 favourable

What was the sales volume variance?
£16,900 adverse
£7,000 favourable
£6,500 favourable
£8,400 adverse

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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