Question
A firm budgeted sales of ₹120 lakh but achieved actual
sales of ₹100 lakh. Variable cost was budgeted at 60% of sales, and actual cost was 62% of actual sales. Calculate the sales variance and interpret its implication.Solution
Sales Variance=Actual Contribution–Budgeted Contribution = ₹38L–₹48L=–₹10lakh
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