A company has a budgeted sales revenue of $500,000 and actual sales revenue of $

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Question: A company has a budgeted sales revenue of $500,000 and actual sales revenue of $450,000. What is the sales variance?

Options:

Correct Answer: $50,000 Unfavorable

Solution:

Sales Variance = Actual Sales - Budgeted Sales = $450,000 - $500,000 = -$50,000 (Unfavorable)

A company has a budgeted sales revenue of $500,000 and actual sales revenue of $450,000. What is the sales variance?

A company has a budgeted sales revenue of $500,000 and actual sales revenue of $450,000. What is the sales variance?

Step 1: Identify the budgeted sales revenue, which is $500,000.
Step 2: Identify the actual sales revenue, which is $450,000.
Step 3: Use the formula for sales variance: Sales Variance = Actual Sales - Budgeted Sales.
Step 4: Substitute the values into the formula: Sales Variance = $450,000 - $500,000.
Step 5: Calculate the result: $450,000 - $500,000 = -$50,000.
Step 6: Determine if the variance is favorable or unfavorable. Since the result is negative, it is unfavorable.

Sales Variance – The difference between actual sales revenue and budgeted sales revenue, indicating performance against expectations.