If actual sales are $96,000 and budgeted sales are $87,000 and actual advertising paid is $6,100 and budgeted advertising is $7,300, the variances are respectively are: Note: F - Favourable, U - Unfavourable (adverse).

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Sales variance = Actual sales - Budgeted sales = $96,000 - $87,000 = $9,000 Favourable because actual sales are higher than budgeted. Advertising variance = Budgeted advertising - Actual advertising = $7,300 - $6,100 = $1,200 Favourable because actual spending on advertising is less than budgeted.

If Actual Sales Are $96,000 and Budgeted Sales Are $87,000