Question

The static​ budget, at the beginning of the​ month, for Beacon Banner Company​ follows:

Static​ budget:

Sales​ volume: 1,100​ units; Sales​ price: $70.00 per unit

Variable​ costs: $33.00 per​ unit; Fixed​ costs: $37,800 per month

Operating​ income: $2,900

Actual​ results, at the end of the​ month, follows:

Actual​ results:

Sales​ volume: 995​ units; Sales​ price: $75.00 per unit

Variable​ costs: $35.00 per​ unit; Fixed​ costs: $35,000 per month

Operating​ income: $4,800

Calculate the sales volume variance for revenue.

A.

​$7,350 U

B.

​$2,800 U

C.

​$3,885 U

D.

​$4,975 F

Answer 1

Sales Volume Variance = budgeted sales price * (Expected Sales volume - Actual sales volume)

Sales Volume Variance = $70 / unit * (1,100 - 995)

Sales Volume Variance = $7,350

Since Actual sales is less than the Budgeted, The variance is Unfavorable

So, Answer is $7,350 Unfavorable

$7,350 U