Franklin Company expected sales were 2,000 units at £100 per unit. During 2004, it had actual sales of 1,800 units at £110 per unit. Budgeted variable costs were £60 per unit. What is Franklin's sales price variance?
A) £8,000 (U)
B) £20,000 (U)
C) £18,000 (F)
D) £2,000 (U)

Question

Quizplus · Accepted Answer

Budgeted revenue = 2,000 x £100 = £200,000
Actual revenue = 1,800 x £110 = £198,000

Sales price variance = Actual revenue - Budgeted revenue
Sales price variance = £198,000 - £200,000
Sales price variance = £(2,000) F (Favorable)

Therefore, the correct answer is C, £18,000 (F).

Franklin Company Expected Sales Were 2,000 Units at £100 Per