The Ferguson Company estimated that October sales would be 100,000 units with an average selling price of $6.00.Actual sales for October were 105,000 units,and average selling price was $5.95. The sales revenue flexible budget variance was:
A) $5,000 favorable.
B) $5,000 unfavorable.
C) $5,250 favorable.
D) $5,250 unfavorable.

Question

Quizplus · Accepted Answer

Sales revenue flexible budget variance = (Actual selling price - Budgeted selling price) x Actual units sold

Here,

Actual selling price = $5.95
Budgeted selling price = $6.00
Actual units sold = 105,000

Sales revenue flexible budget variance = ($5.95 - $6.00) x 105,000 = $5,250 unfavorable.

Therefore, the correct answer is D) $5,250 unfavorable.

The Ferguson Company Estimated That October Sales Would Be 100,000