Petty Simpson Limited budgeted a figure of £32 460 in net profit for the month of June 20X2, based on a target sales figure of 1000 units.The actual outturn was that 990 units were sold.The flexed budget net profit figure was £32 320, and the actual net profit for the month was £33 060. What was the sales profit volume variance for June 20X2?
A)£460
B)£140
C)£740
D)£600

Question

Quizplus · Accepted Answer

The sales profit volume variance is calculated as the difference between the flexed budget net profit and the actual net profit. In this case, £32,320 (flexed budget net profit) - £33,060 (actual net profit) = -£740. However, since the question asks for the variance specifically related to sales volume, and the variance is positive for the company (indicating better performance than expected), the correct interpretation is a positive variance of £740, indicating an error in the provided options. The correct approach to find the sales volume variance specifically would compare the flexed budget to the original budget based on actual sales volume, but with the given options and calculations, there seems to be a misunderstanding in the calculation explanation. The correct calculation for sales volume variance should be based on the difference in volume, but given the options and the context, the closest answer reflecting a variance involving the flexed budget and actual results is not accurately represented in the options provided.

Petty Simpson Limited Budgeted a Figure of £32 460 in Net