Answer (A) is correct . The sales price variance is the difference between actual price and budgeted price, times actual units. Actual price was $11.50 ($92,000 ÷ 8,000). Budgeted price was $10.50 ($105,000 ÷ 10,000). Sales price variance is therefore $8,000 [8,000 actual units × ($11.50 – $10.50)]. The variance is favorable because actual sales price was greater than budgeted sales price.
Answer (B) is incorrect because The sales price variance is based on the actual units sold rather than the budgeted sales.
Answer (C) is incorrect because The sales price variance is the difference between the $11.50 actual sales price ($92,000 ¡Â 8,000) and the $10.50 budgeted sales price ($105,000 ¡Â 10,000), times the 8,000 units sold.
Answer (D) is incorrect because The sales price variance is the difference between the $11.50 actual sales price ($92,000 ¡Â 8,000) and the $10.50 budgeted sales price ($105,000 ¡Â 10,000), times the 8,000 units sold. |
The sales price variance for June was
