Question

For the first week of May, the Carlisle Club budgeted for 600 rooms at an average...

For the first week of May, the Carlisle Club budgeted for 600 rooms at an average room rate of $65. Actual rooms for the week totaled 400 with an average room rate of $70. The price variance for the week was (a) __________; and the volume variance for the week was (b) __________.

A. (a) ‒$7,000; (b) $500

B. (a) $3,000; (b) ‒$6,500

C. (a) $3,000; (b) ‒$13,000

D. (a) ‒$4,000; (b) $4,000

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Answer #1

Answer:

From the given question

Actual Price=$70,

Standard Price=$65

Actual Sales Units=400 Rooms

Budgeted Sales Units=600 Rooms

Sales Price Variance Formula,

Sales Price Variance Formula= (Actual Price – Standard Price) × Actual Sales Units

=($70-$65)*400

=$5*400

=$2,000(Favourable)

Sales Volume Variance Formula,

Sales Volume Variance=(Actual quantity sold - Budgeted quantity sold) x Budgeted price

=(400-600)*$65

   =-$13000(Unfavourable)

The answer for question "a" is $2000(Favourable) & for question "b" answer is -$13,000 that is in option 3

there is no option with the same answers above

so i can conclude that option C is partially Correct.

  

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