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14. When selling prices and inventory costs are stable, a decrease in units sold would make the: Sales Volume Variance Cost Volume A. Favorable B. Unfavorable C. Unfavorable D. Favorable Variance Favorable Unfavorable Favorable Unfavorable
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Answer #1

Solution: Favorable; unfavorable

Explanation: Sales volume variance occurs due to change in revenue because of the difference between actual and budgeted sales units. Cost volume variance happens due to the change in cost that occurs due to the difference between actual and budgeted sales units. Thus a decrease in units sold and when there is a stability in selling cost and inventory will lead to an increase in revenue thus a favorable sales revenue however higher costs thus an unfavorable cost volume variance.

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