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If a company has a budgeted sales revenue of $200,000 and actual sales revenue o

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Question: If a company has a budgeted sales revenue of $200,000 and actual sales revenue of $180,000, what is the sales variance?

Options:

  1. $20,000 Favorable
  2. $20,000 Unfavorable
  3. $10,000 Favorable
  4. $10,000 Unfavorable

Correct Answer: $20,000 Unfavorable

Solution: 

Sales Variance = Actual Sales - Budgeted Sales = $180,000 - $200,000 = -$20,000, which is Unfavorable.

If a company has a budgeted sales revenue of $200,000 and actual sales revenue o

Practice Questions

Q1
If a company has a budgeted sales revenue of $200,000 and actual sales revenue of $180,000, what is the sales variance?
  1. $20,000 Favorable
  2. $20,000 Unfavorable
  3. $10,000 Favorable
  4. $10,000 Unfavorable

Questions & Step-by-Step Solutions

If a company has a budgeted sales revenue of $200,000 and actual sales revenue of $180,000, what is the sales variance?
  • Step 1: Identify the budgeted sales revenue, which is $200,000.
  • Step 2: Identify the actual sales revenue, which is $180,000.
  • Step 3: Calculate the sales variance by subtracting the budgeted sales from the actual sales: $180,000 - $200,000.
  • Step 4: Perform the subtraction: $180,000 - $200,000 = -$20,000.
  • Step 5: Determine if the variance is favorable or unfavorable. Since the result is negative (-$20,000), it is unfavorable.
  • Sales Variance – The difference between actual sales revenue and budgeted sales revenue, indicating performance against expectations.
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