Question

A company uses a standard absorption costing system. The following figures are available for the last accounting period in which actual profit was $$\$ 108,000$$. $$ \begin{array}{ll} \text { Sales volume profit variance } & \$, 000 \text { adverse } \\ \text { Sales price variance } & 5,000 \text { favourable } \\ \text { Total variable cost variance } & 7,000 \text { adverse } \\ \text { Fixed cost expenditure variance } & 3,000 \text { favourable } \\ \text { Fixed cost volume variance } & 2,000 \text { adverse } \end{array} $$ $$ \begin{aligned} &\text { What was the standard profit for actual sales in the last accounting period? }\\ &\begin{array}{ll} \circ & \$ 101,000 \\ \circ & \$ 107,000 \\ 0 & \$ 109,000 \\ 0 & \$ 115,000 \end{array} \end{aligned} $$

   A company uses a standard absorption costing system. The following figures are available for the last accounting period in which actual profit was $$\$ 108,000$$.
$$
\begin{array}{ll}
\text { Sales volume profit variance } & \$, 000 \text { adverse } \\
\text { Sales price variance } & 5,000 \text { favourable } \\
\text { Total variable cost variance } & 7,000 \text { adverse } \\
\text { Fixed cost expenditure variance } & 3,000 \text { favourable } \\
\text { Fixed cost volume variance } & 2,000 \text { adverse }
\end{array}
$$
$$
\begin{aligned}
&\text { What was the standard profit for actual sales in the last accounting period? }\\
&\begin{array}{ll}
\circ & \$ 101,000 \\
\circ & \$ 107,000 \\
0 & \$ 109,000 \\
0 & \$ 115,000
\end{array}
\end{aligned}
$$
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ACCA FMA/FA Foundations in Accountancy-Management Accounting Interactive Text (Practice Revision Kit Not Included)
ACCA FMA/FA Foundations in Accountancy-Management Accounting Interactive Text (Practice Revision Kit Not Included)
BPP Learning Media 1st Edition
Chapter 14, Problem 22 ↓

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Step 1

Standard profit is the expected profit calculated using standard costs and revenues, while variances are the differences between actual results and standard (or budgeted) figures. Variances can be favorable (better than expected) or adverse (worse than expected).  Show more…

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A company uses a standard absorption costing system. The following figures are available for the last accounting period in which actual profit was $$\$ 108,000$$. $$ \begin{array}{ll} \text { Sales volume profit variance } & \$, 000 \text { adverse } \\ \text { Sales price variance } & 5,000 \text { favourable } \\ \text { Total variable cost variance } & 7,000 \text { adverse } \\ \text { Fixed cost expenditure variance } & 3,000 \text { favourable } \\ \text { Fixed cost volume variance } & 2,000 \text { adverse } \end{array} $$ $$ \begin{aligned} &\text { What was the standard profit for actual sales in the last accounting period? }\\ &\begin{array}{ll} \circ & \$ 101,000 \\ \circ & \$ 107,000 \\ 0 & \$ 109,000 \\ 0 & \$ 115,000 \end{array} \end{aligned} $$
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