Question

Milltown Company specializes in selling used cars. During the month, the dealership sold 13 cars at an average price of $14,100 each. The budget for the month was to sell 11 cars at an average price of $15,100. Compute the dealership's sales price variance for the month.

Answer 1

The dealership's sales price variance for the month is: $13,000 unfavorable.

Sales price variance

Using this formula

Sales price variance=(Budgeted sales -Actual sales)× Numbers of cars

Let plug in the formula

Sales price variance=(15100 - 14100) x 13

Sales price variance=$13,000 unfavorable

Therefore the dealership's sales price variance for the month is: $13,000 unfavorable.

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