The exhibit below reflects a summary of performance for a single item of a retail store's inventory for the month ended April 30: (CIA adapted) T
he sales volume variance is:
A) $20,000 favorable.
B) $20,000 unfavorable.
C) $11,000 favorable.
D) $12,000 unfavorable.

Question

The exhibit below reflects a summary of performance for a single item of a retail store's inventory for the month ended April 30: (CIA adapted) T
he sales volume variance is:
A) $20,000 favorable. 
B) $20,000 unfavorable. 
C) $11,000 favorable. 
D) $12,000 unfavorable.

Quizplus · Accepted Answer

The sales volume variance is calculated by multiplying the actual quantity sold (14,000) by the budgeted selling price ($2.00), which equals $28,000. Then we subtract the budgeted sales revenue ($48,000) from the actual sales revenue ($28,000), which results in a variance of $20,000 unfavorable. Therefore, the correct answer is B.

The Exhibit Below Reflects a Summary of Performance for a Single