Week 5

Question 1

Sales price variance

Answer 1

(Actual selling price - Standard selling price) x Actual volume/units

Question 2

Sales volume contribution

Answer 2

(Actual sales units - Budgeted sales units) x Standard contribution (std SP - std VC)

Question 3

Fixed o’head volume variance

Answer 3

(Standard hrs - Budgeted hrs) x Standard rate per hr

OR

(Actual production units - Budgeted production units) x Standard rate per hr

Question 4

Fixed o’head efficiency variance

Answer 4

(Standard hrs - Actual hrs) x Standard rate per hr

Question 5

Fixed o’head capacity variance

Answer 5

(Actual hrs - Budgeted hrs) x Standard rate per hr

Question 6

Standard rate

Answer 6

SR=OAR

OAR= Budgeted fixed overheads(£)/budgeted activity(units/hrs)