Question

ts sold ...................................................................................................... 10,000 9,000 Sales revenue ............................................................................................... $120,000 $103,500 Variable manufacturing cost ........................................................................ 40,000 36,000 Fixed manufacturing cost ............................................................................. 20,000 20,000 Variable selling and administrative cost ...................................................... 10,000 9,000 Fixed selling and administrative cost .......................................................... 10,000 10,000 Required: Compute the sales-price and sales-vo

Answer 1

Answer:

Sales Price Variance  is $ 4,500 Adverse

Sales Volume Variance is $ 12,000 Unfavorable

Explanation:

The difference between the standard and actual selling price, multiplied with actual number of units sold, is known as sale price variance

The difference between the standard and actual number of units sold, multiplied with standard price is Known as Sales volume variance

Budgeted Actual

Units      Sale price   Total           Units      Sale price      Total

10,000    $12.00        $120,000   9000      11.50            103,500

Sales Price Variance = (Standard price - Actual Price) x Actual Sales

                                    = (12 - 11.5) x 9000

                                    = $ 4,500 Adverse

Sales Volume Variance = ( Standard units - Actual units) x Standard Price

                                         =(10,000 - 9000) x 12

                                         = $ 12,000 Unfavorable