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CMA Intermediate · Cost Accounting · Standard Costing and Variance Analysis

Under the turnover (value) method of sales variance analysis, the sales value variance is the difference between:

Under the turnover method, sales value variance is actual sales value minus budgeted sales value. It captures the combined effect of price and volume changes on revenue, unlike the margin method, which compares profits rather than sales revenue.

  1. AActual sales value and budgeted sales valueCorrect
  2. BActual quantity sold at actual price and standard quantity at standard cost
  3. CActual profit and budgeted profit
  4. DActual sales price and budgeted sales price, multiplied by budgeted quantity

Explanation

In the turnover method the sales value variance compares actual sales (actual quantity x actual price) with budgeted sales (budgeted quantity x budgeted price). Option C describes the margin method's profit variance, and option D describes only the price component computed on the wrong quantity base.

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