AICPA BEC SIM – need help

This topic has 2 replies, 2 voices, and was last updated 6 years, 11 months ago by amaffei.

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May 22, 2017 at 10:25 pm #1558870

amaffei
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Does anyone know how to solve the AICPA SIM that relates to variances? It asks for Selling Price Variance and Sales Volume variance for Operating Income? Anyone know how to solve them?

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May 22, 2017 at 11:23 pm #1558888

Mksist
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Selling price variance = Act Quantity * (Act Price – Budget Price)

= 9500 * (21-20)
= 9500 Favorable (selling price higher than budgeted is good)

Volume variance = Budgeted CM Margin * (Act. Quantity – Budget Quantity)
= 5.65 * (9500-10000)
= -2825 Unfavorable (sold less volume than budgeted, bad)

The DM/DL variances are reversed (-) is favorable, (+) unfavorable.

May 23, 2017 at 12:05 am #1558902

amaffei
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thank you very much – your awesome
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