Karpoff Kremes (KK) planned to sell 40,000 Kings at $20 each and 20,000 Kweens at $15 each. Actual sales of the former were 45,000 and 25,000 of the latter, at $19 and $16 respectively. Which is true of KK's sales variance?

Question

Quizplus · Accepted Answer

The sales variance is calculated by comparing actual sales revenue to budgeted sales revenue. The budgeted revenue was (40,000 x $20) + (20,000 x $15) = $1,100,000. The actual revenue was (45,000 x $19) + (25,000 x $16) = $1,283,333. The variance is $1,283,333 - $1,100,000 = $183,333 favorable.

Karpoff Kremes (KK) Planned to Sell 40,000 Kings at $20