TST Limited uses a standard costing system for all its products. Product F has a standard selling price of £30 and budgeted total sales for the year ended 31 May 2019 of 10,000 units. The actual selling price for Product F throughout the year to 31 May 2019 was £35 and the actual units sold were 10,500. The actual variable costs of Product F amounted to £22 per unit in the year to 31 May 2019 while the standard variable cost of Product F is £20. Based on the above information, what is the sales volume variance for Product F for the year ended 31 May 2019?
A) £5,000 Favourable
B) £6,500 Favourable
C) £52,500 Favourable
D) £84,000 Favourable

Question

Quizplus · Accepted Answer

The sales volume variance is calculated as (Actual units sold - Budgeted units sold) x Standard selling price. Therefore, (10,500 - 10,000) x £30 = £5,000 Favourable.

TST Limited Uses a Standard Costing System for All Its