A favorable sales price variance means
A)The cost of products have decreased increasing the profit from the product.
B)The actual selling price is greater than what was budgeted.
C)The company has sold more products than was anticipated.
D)The company sales price decreased causing more product to be sold

Question

Quizplus · Accepted Answer

A favorable sales price variance means that the actual selling price is greater than what was budgeted. This means that the company is generating more revenue per unit sold, which would increase the profit from the product. Option A is incorrect because the cost of the product is not necessarily related to the sales price variance. Option C is incorrect because the question is focused on the sales price variance, not the sales volume variance. Option D is incorrect because a decrease in sales price typically leads to a less favorable variance, as it would decrease revenue per unit sold.

A Favorable Sales Price Variance Means