Question

item to classify standard actual sales volume 100,000 units 96,000 units sales price $ 4 per unit $ 3.90 per unit materials usage 40,000 gallons 42,000 gallons labor price 12.50 per hour 12.45 per hour the sales volume variance was: multiple choice $25,000 favorable. $16,000 unfavorable. $16,000 favorable. $25,000 unfavorable.

Answer 1

The correct response is a negative 16,000-dollar sales volume variance.

What is a Variance in Sales Volume?

The ratio of the actual and anticipated number of units sold to the budgeted price per unit is the sales volume variance. This is the formula: Real units sold - Planned units sold) x Planned cost per unit.= Variation in sales volume.

Sales volume variance = (Actual Units Sold - Standard Units to be Sold) x standard selling price

= (96,000 Units - 100,000 Units) x $ 4 per unit

= -16,600

Since the actual units sold are lower than the standard units to be sold, the variance is negative.

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