Actual sales volume for a period is 5,000 units. Budgeted sales volume is 4,500 units. Actual selling price per unit is $15 and budgeted price per unit is $15.75. The sales volume variance is $7,875.

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Multiple Choice

Actual sales volume for a period is 5,000 units. Budgeted sales volume is 4,500 units. Actual selling price per unit is $15 and budgeted price per unit is $15.75. The sales volume variance is $7,875.

Sales volume variance measures how much revenue changes due to selling more or fewer units than planned, using the budgeted price per unit to value those units. Here, actual units exceed budgeted units by 500, and the budgeted price per unit is 15.75. So the variance is 500 × 15.75 = 7,875. The actual price per unit (15) doesn’t affect this variance—the volume effect is isolated and valued at the budgeted price. Hence, the sales volume variance is 7,875.

Actual sales volume for a period is 5,000 units. Budgeted sales volume is 4,500 units. Actual selling price per unit is $15 and budgeted price per unit is $15.75. The sales volume variance is $7,875.

Prepare for the Accounting SmartBook Test. Practice with tailored questions and helpful hints. Analyze comprehensive explanations for a deep understanding. Ace your exam with confidence!

Actual sales volume for a period is 5,000 units. Budgeted sales volume is 4,500 units. Actual selling price per unit is $15 and budgeted price per unit is $15.75. The sales volume variance is $7,875.

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