Chapter 21, Problem 21QS

To determine

Sales price variance:

Sales price variance can be defined as the differential value of the actual price of the products sold and the standardized value of the price of the products to be sold. It is an integral factor influencing the overall turnover of the business. Hence, any negative deviations if revealed by such variances should be fixed at the earliest.

Sales volume variance:

Sales volume variance can be defined as the differential value of number of units of the products actually sold and the projected number of units that were to be sold. The said value is multiplied by the expected price per unit. The company faces negative sales volume variance when the units actually sold are comparatively less than the projected units to be sold.

The sales price variance and the sales volume variance.