HI, I see this question was posted on here before however those were not easy to
ID: 2468833 • Letter: H
Question
HI, I see this question was posted on here before however those were not easy to understand. I need help with the top part of this graph. I am unsure of the numbers to input as well as if my formulas under Actual sales, flexiable budget, and the budgeted sales (the AQ*AP stuff) is correct. Please answer this showing if the AQ * AP stuff across all three colums is correct along with the nuumbers that go underneath. Thank you so much. Second time I'm posting this. Please help me.
QS 21-20 Computing sales price and volume variances LO A1 Farad, Inc., specializes in selling used SUVs. During the month, the dealership sold 50 trucks at an average price of $9,000 each. The budget for the month was to sell 45 trucks at an average price of $9,500 each. AQ = Actual Quantity SQ= Standard Quantity AP Actual Price SP Standard Price Compute the dealership's sales price variance and sales volume variance for the month Actual Sales Flexible Budget Budgeted Sales AQ AP SQ SP AQ SP $ 9,000 Sales price variance Sales volume variance Total sales variance 0 Unfavorable 0 Favorable FavorableExplanation / Answer
Sales price variance = (Actual Price - Standard Price) x Actual Units Sold
= ($9,000 - $9,500) x 50
= $25,000 Unfavorable.
The variance is unfavorable as the actual price is less than the standard price set.
Sales Volume variance = (Actual Unit Sold - Budgeted Unit Sales) x Standard Profit Per Unit
Since standard profit is not given, standard price per unit is taken.
= (50 - 45) x $9,500
= $47,500 Favorable.
The variance is favorable as the actual units sold is more than the budget.
Total Sales variance = Sales price variance + Sales volume variance
= $25,000 Unfavorable + $47,500 Favorable.
= $22,500 Favorable.
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