MAC - Sales variances

one-eyed-womble

In the back of the Osborne book, there's a few pages about sales variances which are for MAC students only. I'd forgotten all about these until today, cos I haven't seen them come up on any MAC past papers that I've done.

Is any other MAC students revising these?

CelticStar

Yep, I noticed them a few days ago too. They're not too bad though - fixed overhead variances are the worst!

one-eyed-womble

Thanks CelticStar.

I'm ok now on the overhead variances, but only if I can draw a little diagram for them!

Cyfarthfa

I understand these sales variances ok if you gotta do either the price variance or volume variance using either absorption or marginal but I've just looked at the notes i've got from kaplan and it goes on about doing an operating cost statement and refers to a 2005 paper which isn't even given.

Do you know if you do the Operating cost statement you do it the same as if you were doing std cost for actual production but add in your sales as well??

one-eyed-womble

That's a really good question. I'm using Osborne books and there's no mention of how to deal with sales variances in an operating statement.

I would be inclined to leave them out as otherwise the operating statement wouldn't reconcile. The sales variance indicate how the profit varies not the costs. But that's just a guess.

Cyfarthfa

Let's just hope it doesn't come up. Surely there should be more study text on it if it was! Well that's my theory anyway!