The sales volume variance was:
A) $16,000 favorable.
B) $16,000 unfavorable.
C) $25,000 unfavorable.
D) $25,000 favorable.

Question

The sales volume variance was:
A) $16,000 favorable. 
B) $16,000 unfavorable. 
C) $25,000 unfavorable. 
D) $25,000 favorable.

Quizplus · Accepted Answer

Sales volume variance = Static budget (based on planned volume) − Flexible budget (based on actual volume)
Sales volume variance = (100,000 units × $4.00 per unit) − (96,000 units × $4.00 per unit)
Sales volume variance = $400,000 − $384,000 = $16,000 unfavorable
Since the actual volume was less than the planned volume, the variance is unfavorable.

The Sales Volume Variance Was