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If a company has a budgeted sales of $500,000 and actual sales of $450,000, what

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Question: If a company has a budgeted sales of $500,000 and actual sales of $450,000, what is the sales variance?

Options:

  1. $50,000 Favorable
  2. $50,000 Unfavorable
  3. $100,000 Favorable
  4. $100,000 Unfavorable

Correct Answer: $50,000 Unfavorable

Solution: 

Sales variance = Actual Sales - Budgeted Sales = $450,000 - $500,000 = -$50,000, which is Unfavorable.

If a company has a budgeted sales of $500,000 and actual sales of $450,000, what

Practice Questions

Q1
If a company has a budgeted sales of $500,000 and actual sales of $450,000, what is the sales variance?
  1. $50,000 Favorable
  2. $50,000 Unfavorable
  3. $100,000 Favorable
  4. $100,000 Unfavorable

Questions & Step-by-Step Solutions

If a company has a budgeted sales of $500,000 and actual sales of $450,000, what is the sales variance?
  • Step 1: Identify the budgeted sales amount, which is $500,000.
  • Step 2: Identify the actual sales amount, which is $450,000.
  • Step 3: Calculate the sales variance by subtracting the budgeted sales from the actual sales: $450,000 - $500,000.
  • Step 4: Perform the subtraction: $450,000 - $500,000 = -$50,000.
  • Step 5: Determine if the variance is favorable or unfavorable. Since the result is negative (-$50,000), it is unfavorable.
  • Sales Variance – The difference between actual sales and budgeted sales, indicating performance against financial expectations.
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