Franklin Company expected sales were 2,000 units at £100 per unit. During 2011, it had actual sales of 1,800 units at £110 per unit. Budgeted variable costs were £60 per unit. What is Franklin's sales price variance?
A)£8,000 (U)
B)£20,000 (U)
C)£18,000 (F)
D)£2,000 (U)

Question

Quizplus · Accepted Answer

The actual sales price per unit (£110) is £10 higher than the budgeted sales price per unit (£100), resulting in a favorable variance. 
Sales price variance = (Actual sales price - Budgeted sales price) x Actual units sold 
Sales price variance = (£110 - £100) x 1,800 
Sales price variance = £18,000 (F)

Franklin Company Expected Sales Were 2,000 Units at £100 Per