A company planned to sell 15,000 units at $10 each but sold only 12,000 units. W

₹0.0

Question: A company planned to sell 15,000 units at $10 each but sold only 12,000 units. What is the sales volume variance?

Options:

Correct Answer: $30,000 Unfavorable

Solution:

Sales Volume Variance = (Actual Units - Budgeted Units) * Selling Price = (12,000 - 15,000) * $10 = -$30,000 (Unfavorable)

A company planned to sell 15,000 units at $10 each but sold only 12,000 units. What is the sales volume variance?

A company planned to sell 15,000 units at $10 each but sold only 12,000 units. What is the sales volume variance?

Step 1: Identify the budgeted units. The company planned to sell 15,000 units.
Step 2: Identify the actual units sold. The company sold 12,000 units.
Step 3: Identify the selling price per unit. The selling price is $10.
Step 4: Calculate the difference between actual units sold and budgeted units. This is 12,000 - 15,000.
Step 5: The result from Step 4 is -3,000 units. This means the company sold 3,000 units less than planned.
Step 6: Multiply the difference from Step 4 by the selling price. This is -3,000 units * $10.
Step 7: The result from Step 6 is -$30,000. This indicates a sales volume variance of -$30,000.
Step 8: Since the result is negative, it is considered unfavorable.

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