ACCA Applied Knowledge · Management Accounting · Reconciliation of budgeted and actual profit
Marl Co's budgeted profit was $50,000. Variances: sales price $4,000 adverse, sales volume $6,000 favourable, material price $3,000 favourable, material usage $2,000 adverse, labour rate $1,500 adverse, fixed overhead expenditure $2,500 favourable. What was actual profit?
Actual profit is $54,000, but that figure is not offered, so this item is invalid.
- A$53,500Correct
- B$51,500
- C$56,500
- D$50,500
Explanation
Favourable: 6,000 + 3,000 + 2,500 = 11,500. Adverse: 4,000 + 2,000 + 1,500 = 7,500. Net favourable = 4,000. Actual profit = 50,000 + 4,000 = $54,000? Recheck: 11,500 - 7,500 = 4,000, so $54,000.
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