W6 - Sales Variance LEARN ALL

Question 1

Sales volume variance

Answer 1

(Actual sales volume - Budgeted sales volume) x Standard Profit

Standard profit = Standard selling price - Standard cost per unit

Question 2

Sales price variance

Answer 2

(Actual Selling Price − Budgeted Selling price) × Actual Sales Volume

Question 3

Sales Volume - Further split

Answer 3

Sales volume variance can also be split into two further variances:

• Quantity
• Mix

Question 4

Sales Mix Variance def. and formula

Answer 4

It indicates the effect on profit of changing the mix of actual sales from the standard mix.

(Actual sales vol. x Average prof. per unit in actual mix) - (Actual sales vol. Average prof. per unit in standard mix)

Question 5

Sales Quantity variance def. and formula

Answer 5

It indicates the effect on profit of changing the total amount sold from the budget (valued at average contribution per unit).

(Actual sales vol. x Average prof. per unit in standard mix) - (Budgeted sales vol. x Average prof. per unit in standard mix)

Question 6

Sales Quantity Variance split

Answer 6

Market share variance
Market size variance

Question 7

Market size variance

Answer 7

[(Budgeted market share x Actual Market Size) -Budgeted Sales Volume] x
Standard Contribution per unit

Budgeted sales vol = Budgeted market share x Budget market size

Question 8

Market Share Variance

Answer 8

[Actual sales vol. - (Budgeted market share x Actual market size)] x Standard contribution per unit

Actual sales vol = Actual market share x actual market size