Reconcile profits under absorption

NotesQuizCBE

Operating Statement for the period ending …….(under Absorption Costing)

$
budgeted profit x
sales volume variance x f
sales price variance (x) a
----
cost variances $f $a
materials price x
material usage x
labour rate x
labour idle x
labour efficiency x
variable overheads expenditure x
variable overheads efficiency x
fixed overheads expenditure x
fixed overheads efficiency x
fixed overheads capacity x
---- ----
x x (x) a
----
actual profit x
===
Budgeted profit on budgeted sales $100,000
Sales volume variance (F) $20,000
Budgeted profit on actual sales $120,000
Sales price variance (A) -$10,000
All variable variances (F) $30,000
Fixed production volume variance (A) -$5,000
Actual profit ?

Solution

= 120,000 - 10,000 + 30,000 - 5,000 = $135,000

NotesQuizCBE