Sales (1)

DM
DL
VFOH
FFO

AQ X AP( Actual Cost)

1,100

SQ X SP (st SQ X SP ( Standard cost)

###
1,000

Actual
21,000
10,285
5,808
2,100
1,100
1,707

Flexible Bu Static Budget

22,000
20,000
11,000
10,000
5,500
5,000
2,200
2,000
1,100
1,000
2,200
2,000
Solely due to difference involume. This is a favourable variance.

1000 U
715 F
308 U
100 F
-

Interperetation =

Sales department had sold more, by using giving pric

This is unfavourable as they made 1000 U but 200 Sa

=May be due to production or purchasing .Isit Price or isit quantity used?? So we hae to break down
Actual
Flexible
Break into price and efficiency
1,100
###
Price variance / Rate/ S Effieiency varaince
AQ X SP
<>
AQXSP
<>
SQ X SP
DM
DL
VFO

10,285 935U
1210*4.8
5,808 242F
2,100 320F

9,350 1650 F
1210X5
6,050 550U
1210X2
2,420 220U

11,000

1,100 100 U
Budgete f the
100F
cost of
Spend more fxed costs sales
Fixed rental of factory
Supevsor salary
Depreciation
Production side is in charge

5,500
2,200
1,100

There is no underapplied or underapplied if you use variable costing. Budgetd

SO aborpton costing takes into account

Sales volume variance(Actual sale volume - Budgeted sales volume ) X Sales price
520 U =
(1100- 1000) X 2

This is a favourable variance.

old more, by using giving price discount in order to push volume.Try to be more compettive on prices to push vo
they made 1000 U but 200 Sales F.U outweigh F

?? So we hae to break down

Favourable cause by right you shld be using 2,200. but now you using 1,870
Production department have to explain this. As workers may not lower skilled.

F means effective cost control.Can be indirect material. Production is responsible. This variance is the

use variable costing. Budgetd and fxed varaible does not take into account activity

Sales price variance = (Actual sales price- Budgeted sales price ) X actual sales volume
1000=
(19.1-20) X 1,100

e on prices to push volume.

Whoever hires them is rsponsible for the F. Production mgr may blame the F because hire less skilled

e. This variance is the direct labour applied. You use more DL, you absorb more overheads

cause hire less skilled workeds

VOH

Actual
AQXAP
Price
607,500 60750U

FFO

183,000 3000U

Always use actual sales volume

Resources used
Flexible budget
AQXSP
Efficiency SQXSP
546750 60750U
486000
180,000 18000U
162,000
Causeits underapplied

Standard Price = FOH / Ma

180000/(15000*4)
SQ
13500

4500
162000
tandard Price = FOH / Machine 1.111111
80000/(15000*4)

VFO
FFO

Actual
SP and SQ Using actual volume.
APXAQ
Spending v SPXAQ
Efficiency SPXSQ
25,300 1100F
26,400 17400U
9,000
sp=12
50,500 10500U
40,000 25000U
15,000
sp=20
Poorspendin control
Both U because they apply less than acutal
Actual < Budgeted saes volume
Explain what is the problem if you
Problems overed when you use actualbudget

Budgeted means should be incurred

volume.
sq=0.5*1500
sq=0.5*1500

Actual
20000 units
2880/72
DM@ $40
720/72
DL@ $10
900/72
VFO
144/3mths
Dep
216/3months
S.salaries
Balance
Other FOH
Total

Flexible
20000

Static
24000

865000 65000U

800000

2,880,000

960000

221200 21200U

200000

720,000

240000

304000 250000U

250000

900,000

300000

48000 -

48000

144,000

48000

75600 3600U

72000

216000

72000

478000 2000F

480000

1440000

480000

1991800
Same volume leve, it will eliminate any change in activity

if compare to static , it will be like as if it iw favourable. Does not imp

24
Static

DO not fx the Fixed overhead

e any change in activity which will affect performance

avourable. Does not imply true performance. We shld therefore analyse agianst flexible budget.i

budget.i

Requires 7 board feet pf of hardwood. 1.5 board feet left leftover in 1 box. $5 / b

DM
DL

Actial
Price var
Eff var
AQX AP
AQXSP
Material used = 28000 X60000/30000
56000
53200
8000*90%
1000*8
7200
8000

Budgeted
SQX SP
60800
60800
16*4000
6,400

t leftover in 1 box. $5 / board foot, 1.20 in transportaion / board foot