Hatton and Hussein Limited's sales budget for July 20X6 was 680 units at a standard selling price of £32.50.At the end of the month the management accountant flexed the budget; the flexed sales figure was £22 620.The actual selling price achieved in the month was £33.75. What was the sales price variance for July 20X6?

Question

Quizplus · Accepted Answer

First, we need to calculate the flexible budget sales figure based on the actual selling price:
Flexed sales figure = Actual selling price x Flexed sales volume
Flexed sales volume = Actual sales in units = Flexed sales figure / Actual selling price
Flexed sales volume = £22,620 / £33.75 = 670.22 (rounded to 670 units)

Then, we can calculate the sales price variance:
Sales price variance = (Actual selling price - Standard selling price) x Actual sales volume
Sales price variance = (£33.75 - £32.50) x 680
Sales price variance = £870.00 (Favorable)

Therefore, the correct answer is C.

Hatton and Hussein Limited's Sales Budget for July 20X6 Was