Question

QS 21-21 Sales variances LO A1 In a recent year, BMW sold 217,544 of its 1 Series cars. Assume the company expected to sell 226,744 of these cars during the year. Also assume the budgeted sales price for each car was $25,000, and the actual sales price for each car was $25,200. AQ = Actual Quantity SQ = Standard Quantity AP= Actual Price SP=Standard Price Compute the sales price variance and the sales volume variance, Actual Sales Flexible budget Budgeted Sales

Answer 1

Answer

	Actual Sales				Flexible Budget				Standard Cost
	AQ	x	AP		AQ	x	SP		SQ	x	SP
	217,544	x	$                                                       25,200.00		217,544	x	$                                    25,000.00		226,744	x	$             25,000.00
		$                            5,482,108,800.00				$ 5,438,600,000.00				$    5,668,600,000.00
	Sale Price Variance			$                43,508,800.00	Sales Volume Variance			$                     230,000,000.00

Sale Price Variance			$                43,508,800.00	Favourable
Sales Volume Variance			$             230,000,000.00	Unfavourable
Total Sales Variance			$             186,491,200.00	Unfavourable