Use the information below to answer the following questions. $\begin{array}{llc}&\text { Flexed Budget for April }&\text { Actual for April }\
\text { Output } & 40,000 \text { units } & 40,000 \text { units } \
\text { Sales } & \$ 500,000 & \$ 400,000 \
\text { Raw materials } & \$ 100,000 & \$ 88,000 \
\text { Labour } & \$ 250,000 & \$ 180,000 \
\text { Overheads } & \$ 325,000 & \$ 375,000
\end{array}$
-Refer to the table above. The adverse (unfavourable)sales variance of $100,000 is best explained by:

Question

Quizplus · Accepted Answer

The adverse sales variance of $100,000 is due to a decrease in the price of the units sold, as the actual sales ($400,000) were lower than the flexed budget ($500,000) despite selling the same number of units (40,000 units). This indicates that the unit selling price was lower than planned.

Use the Information Below to Answer the Following Questions -Refer to the Table Above