Question

Question 17 )The sales volume variance is the differernc between the ? A) Actual results and the expected results in the flexible budget for the actual units sold B)Expected results in the flexible budget for the actual units sold and the static budget c)Static budget and actual amounts due to differences in sales price d)flexible budget and static budget due to differences in fixed costs

Answer 1

Ans 17)

The Sales Volume Variance is the difference between the

B) Expected results in the flexible budget for the actual units sold and the static budget.

Flexible Budget is a budget which is developed at the end of a period and for various level of sales volume but the static Budget is prepared for only one level of sales volume.

Sales Volume Variance is arises due to the difference in the actual number of units sold and the number of units on which static budget is prepared or we can say that it occurs due to inaccuracy in forecasting of units of product to be sold. This is calculated by deducting actual amount and budgeted amount.