A company has a budgeted sales volume of 10,000 units at $20 each. If actual sal

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Question: A company has a budgeted sales volume of 10,000 units at $20 each. If actual sales are 9,000 units at $22 each, what is the sales volume variance?

Options:

$2,000 Favorable
$2,000 Unfavorable
$10,000 Favorable
$10,000 Unfavorable

Correct Answer: $2,000 Favorable

Solution:

Sales volume variance = (Actual units - Budgeted units) * Budgeted price = (9,000 - 10,000) * $20 = -$20,000, which is $2,000 Favorable.

A company has a budgeted sales volume of 10,000 units at $20 each. If actual sal

Practice Questions

A company has a budgeted sales volume of 10,000 units at $20 each. If actual sales are 9,000 units at $22 each, what is the sales volume variance?

$2,000 Favorable
$2,000 Unfavorable
$10,000 Favorable
$10,000 Unfavorable

Questions & Step-by-Step Solutions

A company has a budgeted sales volume of 10,000 units at $20 each. If actual sales are 9,000 units at $22 each, what is the sales volume variance?

Step 1: Identify the budgeted sales volume, which is 10,000 units.
Step 2: Identify the actual sales volume, which is 9,000 units.
Step 3: Identify the budgeted price per unit, which is $20.
Step 4: Calculate the difference between actual units and budgeted units: 9,000 - 10,000 = -1,000 units.
Step 5: Multiply the difference by the budgeted price: -1,000 units * $20 = -$20,000.
Step 6: Interpret the result: A negative variance of -$20,000 means the company sold fewer units than planned, which is unfavorable.
Step 7: Determine if the variance is favorable or unfavorable: Since the actual sales are less than budgeted, it is $20,000 unfavorable.

Sales Volume Variance – The difference between actual sales volume and budgeted sales volume, multiplied by the budgeted price.

A company has a budgeted sales volume of 10,000 units at $20 each. If actual sal

What’s inside this PDF?

A company has a budgeted sales volume of 10,000 units at $20 each. If actual sal

Practice Questions

Questions & Step-by-Step Solutions

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