Taylor Company's budgeted sales were 10,000 units at £200 per unit. Actual sales were 9,200 units at £210 per unit. Taylor's sales price variance is
A)£68,000 (U).
B)£100,000 (U).
C)£8,000 (U).
D)£92,000 (F).

Question

Quizplus · Accepted Answer

The actual revenue can be calculated as: 
Actual revenue = actual units sold x actual price per unit = 9,200 x £210 = £1,932,000
The expected revenue (based on budgeted sales and price) can be calculated as: 
Expected revenue = budgeted units sold x budgeted price per unit = 10,000 x £200 = £2,000,000
The sales price variance is the difference between actual revenue and expected revenue: 
Sales price variance = actual revenue - expected revenue = £1,932,000 - £2,000,000 = £(68,000) F
Since the actual revenue is lower than the expected revenue, the sales price variance is unfavorable (F).

Taylor Company's Budgeted Sales Were 10,000 Units at £200 Per