Concept explainers
Concept Introduction:
Sales variance is the difference between budgeted sales and actual sales. Sales variance can be because of two reasons
- Actual selling price of the product varies from the budgeted selling price and/or
- Actual quantity of sales varies from the budgeted quantity.
Therefore, sales variance is the sum of (i) Sales Price Variance and (ii) Sales Volume Variance.
Sales Price Variance:
The difference between the actual selling price and the budgeted selling price is the Sales Price Variance.
Sales Volume Variance:
The difference between actual quantity of sales and budgeted quantity is the Sales Volume Variance.
The following formulas are used to calculate Sales variance:
SalesVariance=Sales Price Variance+ Sales Volume Variance
Also Sales Variance = Budgeted Sales − Actual SalesSales Price Variance = Actual Sales - Actual quantity of Sales at budgeted price
Sales Volume Variance = Actual quantity at budgeted price -Budgeted quantity at budgeted price
Sales variance gives a view of deviations from the set standards which can be wither favorable or unfavorable
Sales Price and Volume Variance

Want to see the full answer?
Check out a sample textbook solution
Chapter 23 Solutions
FUND ACCOUNTING PRINCIPLES CONNECT
- What is the company's plantwide overhead rate?arrow_forwardMason Corp. reports the following partial income statement: • Sales: $2,000,000 . • Less: Variable costs: $1,200,000 Contribution Margin: $800,000 • Less: Fixed costs: $300,000 Net Operating Income: $500,000 What is Mason Corp.'s degree of operating leverage?arrow_forwardGiven correct option? General accounting questionarrow_forward
- Kindly help me with accounting questionsarrow_forwardSummit Corp. purchased a patent on January 1, 2022, for $500,000. The company expects to derive economic benefits from the patent for 10 years, although its legal life is 20 years. Additionally, during 2022, Summit incurred $200,000 in research and development costs. What is the carrying amount of the patent as of December 31, 2022? a) $450,000 b) $475,000 c) $490,000 d) $300,000arrow_forwardMrs. Adams is employed as a graphic designer by XYZ Creative Agency. This year, she paid a $250 fee to renew her professional design certification and $1,500 for work-related software and materials. Mrs. Adams received no reimbursement from her employer. Her AGI is $50,000, she itemizes deductions, and her marginal tax rate is 22%. Compute Mrs. Adams' after-tax cost of these employment-related expenses.arrow_forward
- A company has a net income of $250,000, a profit margin of 9.2%, and accounts receivable balance of $150,000. Assuming 60% of sales are not credit, what is the company's days' sales in receivable?arrow_forwardBlockbuster Co is building a new state of the art cineplex at a cost of $3,500,000.They received a capital investment of $1,500,000. The remainder of funds will haveto be borrowed so they decided to issue bonds. They have issued 10.5%, 5-yearbonds. These bonds were issued on January 1st, 2020, and pay semi-annual intereston July 1st and January 1st. The bonds yield 10%. The year end is December 31st Assume that on July 1 2023, Blockbuster Co. retires the bond at a cost of1,065,000 plus accrued interest, if applicable. Prepare the journal entryto record this retirementarrow_forwardGet correct answer with accounting questionarrow_forward
- Do fast answer of this question general accountingarrow_forwardSummit Enterprises signs a $200,000, 6%, 9-month note payable with City Bank on July 1. What is the total cash paid at maturity of the note? A) $209,000 B) $212,000 C) $209,500 D) $206,000arrow_forwardWhat is the warranty liability at the end of the month?arrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education





