JMJ Limited operates a standard costing system for all its products. The standard selling price of product A is £50 and the budgeted sales for the year ended 31 March 2019 are 5,000 units. During the year ended 31 March 2019, 6,000 Product As were sold and the average selling price during the year was £52. What is the sales price variance for the year ended 31 March 2019?
A) £2,000 Unfavourable
B) £2,000 Favourable
C) £12,000 Unfavourable
D) £12,000 Favourable

Question

Quizplus · Accepted Answer

The sales price variance is calculated as (Actual Selling Price - Standard Selling Price) x Actual Quantity Sold. Here, it is (£52 - £50) x 6,000 = £12,000 Favourable.

JMJ Limited Operates a Standard Costing System for All Its