Question

A company operates standard costing & Budgetary control system. Following details are available in respect of a month. Required to calculate necessary sales variance. Product Budget Actual Qty Price Value Qty Price Value A 1000 10 10,000 1200 11 13,200 B 750 20 15,000 700 20 14,000 C 500 30 15,000 600 28 16,800 D 250 40 10,000 200 41 8,200 Total 2500 50,000 2700 52,200 In order to calculate all the sales variances it is necessary to ascertain , a) Standard sales : i.e. actual quantities sold valued at standard selling price. b) Revised standard sales: i.e. standard sales expressed in budgeted sales ratio.

Answer 1

	Standard:	Quantity	Rate	Amount
	A	1,000	10.00	10,000
	B	750	20.00	15,000
	C	500	30.00	15,000
	D	250	40.00	10,000
		2,500		50,000
	Actual	Quantity	Rate	Amount
	A	1,200	11.00	13,200
	B	700	20.00	14,000
	C	600	28.00	16,800
	D	200	41.00	8,200
		2,700		52,200
A	Standard Sales:
	Actual	Quantity	Rate	Amount
	A	1,200	10.00	12,000
	B	700	20.00	14,000
	C	600	30.00	18,000
	D	200	40.00	8,000
				52,000
B	Revised Standard Sales:
	Standard:	Quantity	Ratio	Actual Sales
	A	1,000	40.00%	1080	(Total Q*Ratio)
	B	750	30.00%	810
	C	500	20.00%	540
	D	250	10.00%	270
		2,500		2,700
	Sales Volume Variance:				Standard
		Actual	Standard:	Variance	Sales Price	Variance
	A	1,200	1,000	200	10.00	2000
	B	700	750	-50	20.00	-1000
	C	600	500	100	30.00	3000
	D	200	250	-50	40.00	-2000
					Favourable	2000
	Sales Price Variance:
		Actual Price	Standard Price	Difference	Actual Unit	Sales Price Variance
	A	11.00	10.00	1.00	1,200	1200
	B	20.00	20.00	0.00	700	0
	C	28.00	30.00	-2.00	600	-1200
	D	41.00	40.00	1.00	200	200
					Favourable	200
	Sales Mix Variance:
		Actual	Actual Unit at S.Mix	Difference	Standard Price	Sales Mix Variance
	A	1,200	1080	120.00	10.00	1200
	B	700	810	-110.00	20.00	-2200
	C	600	540	60.00	30.00	1800
	D	200	270	-70.00	40.00	-2800
		2700	2700		Adverse	-2000