JAX Inc. In early 2012, JAX Inc. had budgeted for the production and sales of 5,000 units at a sales price of $15 per unit. The following information is available regarding the standard cost for each unit:
Actual results for 2012 were determined to be as follows:
Refer to the JAX Inc. information above. What was JAX Inc.'s sales price variance for 2012?
A) $15,000 F
B) $15,000 U
C) $16,800 F
D) $16,800 U

Question

JAX Inc. In early 2012, JAX Inc. had budgeted for the production and sales of 5,000 units at a sales price of $15 per unit. The following information is available regarding the standard cost for each unit:
 Actual results for 2012 were determined to be as follows:
 Refer to the JAX Inc. information above. What was JAX Inc.'s sales price variance for 2012?
A) $15,000 F 
B) $15,000 U 
C) $16,800 F 
D) $16,800 U

Quizplus · Accepted Answer

The formula for sales price variance is (actual selling price - budgeted selling price) x actual units sold.

In this case, the actual selling price was $13 per unit ($65,000 ÷ 5,000 units) and the budgeted selling price was $15 per unit.

Therefore, the sales price variance is (13-15) x 5,000 = $16,800 F.

JAX Inc in Early 2012, JAX Inc