Question

A revenue variance is the difference between what the total sales revenue should be, given the actual level of activity of the period, and the actual total sales revenue.
A. True
B. False

Answer 1

Answer:

True

Explanation:

Revenue variance is the difference between the expected or the budgeted revenue and the actual revenue realized. In the course of doing business, managers sometimes make estimations of what the sales volume might look like or the price at which they would sell their products. When these estimations are realized and even exceeded, then we can say that there is a favorable revenue variance. But, if the estimations budgeted were not realized, then the revenue variance was not favorable.

So, managers should take care to take every factor into consideration so as to have a favorable revenue variance.

Answer 2

Answer: True

Explanation:

Revenue variances are used by an organization in order to know the difference that exists between the expected sale by the organization and and actual sales.

The revenue variance is the difference between what the total sales revenue should be, given the actual level of activity of the period, and the actual total sales revenue.