Martin Corporation had an unfavorable sales price variance of $4,800 for 2012. Martin had budgeted for sales of 10,000 units at a sales price of $5 each. Actual sales in 2012 totaled 12,000 units. What was the actual sales price per unit?
A) $5.40
B) $4.60
C) $4.52
D) $5.48

Question

Quizplus · Accepted Answer

The actual sales price per unit can be calculated by first determining the total actual sales revenue and then dividing by the actual number of units sold. The unfavorable sales price variance of $4,800 indicates that the actual sales revenue was $4,800 less than the budgeted sales revenue. The budgeted sales revenue was 10,000 units * $5 = $50,000. Therefore, the actual sales revenue was $50,000 - $4,800 = $45,200. Given that the actual number of units sold was 12,000, the actual sales price per unit is $45,200 / 12,000 = $3.7667. However, since this answer is not among the options and there seems to be a misunderstanding in the calculation, let's correct the approach:The correct calculation should consider the variance per unit and then adjust the budgeted sales price accordingly. An unfavorable variance means the actual price is lower than the budgeted price.The total budgeted revenue is 10,000 units * $5 = $50,000. The actual units sold were 12,000. If we mistakenly calculate the actual revenue based on the variance and budgeted sales, we might get confused. The correct approach is to find the actual price per unit that would result in an unfavorable variance when more units are sold.Given the unfavorable variance of $4,800 and the actual sales volume of 12,000 units, we can calculate the difference per unit and then adjust the budgeted sales price to find the actual sales price.The variance of $4,800 spread over 12,000 units sold is $4,800 / 12,000 units = $0.40 per unit unfavorable. This means the actual sales price per unit was $0.40 less than the budgeted $5.00, making it $5.00 - $0.40 = $4.60 per unit.

Martin Corporation Had an Unfavorable Sales Price Variance of $4,800