For the first week of May, a hotel club budgeted for 600 room nights at an average room rate of €65. Actual room nights for the week totalled 500, at an average room rate of €70. The price variance for the week was ______ and the quantity variance for the week was ______?

Question

Quizplus · Accepted Answer

The price variance is calculated as (Actual Rate - Budgeted Rate) x Actual Quantity = (€70 - €65) x 500 = €2,500 favourable. The quantity variance is (Actual Quantity - Budgeted Quantity) x Budgeted Rate = (500 - 600) x €65 = €6,500 unfavourable.

For the First Week of May, a Hotel Club Budgeted