Question

TLA Inc. has budgeted for sales of 11,250 units of TS at a price of $18...

TLA Inc. has budgeted for sales of 11,250 units of TS at a price of $18 per unit. The actual sales for the period were 10,000 units of TS at $19 per unit. What was the sales-volume variance for the current period?

$23,750 favorable

$23,750 unfavorable

$22,500 favorable

$22,500 unfavorable
Business   Accounting   
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Answer #1

Answer :

d. $22,500 unfavorable

calculation:

sales volume variance = (actual sales in units - budgeted sales in units) * budgeted price per unit

Actual sales = 10,000 units

Budgeted sales = 11,250 units

Budgeted price per unit = $18

Sales volume variance = (10,000 - 11,250) * $18

= -1,250 * $18

= -$22,500

The negative sign the sales volume variance indicates that the variance is unfavorable.

or,

The actual sales is less than what they have budgeted. This also indicates that the variance is unfavorable for the company.

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