Question

The Beanny Company had budgeted sales of 1,000 units with a per unit selling price of $5 per unit. Actual sales were 1,100 units at a selling price of $4.75. What is its sales volume variance?

Answer 1

Its sales volume variance is: $500 Favorable.

Sales volume variance

Using this formula

Sales volume variance = (Actual units sold− Budgeted units sold) × Selling price

Let plug in the formula

Sales volume variance = ( 1,100 − 1,000) × $5 per unit

Sales volume variance = $500 favorable

Therefore the Sales volume variance is 500 favorable.

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