Fox Manufacturing
At the beginning of the year, Fox Manufacturing had budgeted for the production and sale of 84 000 units. The standard sales price and variable cost per unit were budgeted to be $25.00 and $10.00, respectively. Actual sales for the year totalled 81 000 units, and the actual sales price and variable cost per unit were $24.00 and $10.00, respectively. Both budgeted and actual fixed costs were $75 000.
-What was Fox's sales price variance for the year?
A) $81 000 F
B) $81 000 U
C) $84 000 F
D) $84 000 U

Question

Quizplus · Accepted Answer

The sales price variance is calculated as the difference between the actual sales price and the budgeted sales price, multiplied by the actual units sold. Here, it's ($24.00 - $25.00) * 81,000 = -$81,000, indicating an unfavorable variance since the actual sales price was lower than expected.

Fox Manufacturing At the Beginning of the Year, Fox Manufacturing Had Budgeted