Use the following information to answer questions
Faust Corporation manufactures cleaning fluid. During 2010, Faust's salespeople sold 1,700,000 bottles of cleaning fluid at $1.80 per bottle. Faust budgeted that salespeople would sell 1,600,000 bottles of cleaning fluid at $1.90 per bottle.
-What is Faust's sales price variance?
A) $ 20,000 favorable
B) $170,000 favorable
C) $170,000 unfavorable
D) $190,000 favorable
E) $190,000 unfavorable

Question

Use the following information to answer questions 
Faust Corporation manufactures cleaning fluid. During 2010, Faust's salespeople sold 1,700,000 bottles of cleaning fluid at $1.80 per bottle. Faust budgeted that salespeople would sell 1,600,000 bottles of cleaning fluid at $1.90 per bottle.
-What is Faust's sales price variance?
A) $ 20,000 favorable
B) $170,000 favorable
C) $170,000 unfavorable
D) $190,000 favorable
E) $190,000 unfavorable

Quizplus · Accepted Answer

The sales price variance is calculated as (Actual Price - Budgeted Price) * Actual Quantity. Here, it is ($1.80 - $1.90) * 1,700,000 = -$0.10 * 1,700,000 = -$170,000, indicating an unfavorable variance because the actual price is less than the budgeted price.

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