Question

Milltown Company specializes in selling used cars. During the month, the dealership sold 16 cars at an average price of $14,400 each. The budget for the month was to sell 14 cars at an average price of $15,400. Compute the dealership's sales volume variance for the month.

Answer 1

Answer:

$30,800

Explanation:

Data provided in the question:

Actual number of cars sold = 16

Average price of the car = $14,400

Budgeted number of cars to be sold = 14

Average budgeted price of the car = $15,400

Now,

Sales volume variance

= ( Actual quantity sales - Budgeted quantity sales ) × Budgeted price

= ( 16 - 14 ) × $15,400

= 2 × $15,400

= $30,800