A sales volume variance will be favorable when:
A) actual units sold is greater than budgeted sales volume.
B) actual units sold is less than budgeted sales volume.
C) actual selling price is greater than budgeted selling price.
D) actual contribution margin is greater than budgeted contribution margin.

Question

Quizplus · Accepted Answer

A sales volume variance measures the difference between the actual units sold and the budgeted sales volume. A favorable variance occurs when actual units sold is greater than budgeted sales volume because it means more products were sold than expected, leading to higher revenue and potentially higher profits. B, C, and D are incorrect because they relate to other types of variances such as price variance or contribution margin variance.

A Sales Volume Variance Will Be Favorable When