Question

If actual sales totaled $500,000 for the current year (40,000 units at $12.50 each) and planned sales were $495,000 (45,000 units at $11.00 each), the difference between actual and planned sales due to the unit price factor is A. $60,000 increase. B. $55,000 decrease. C. $20,000 increase.

Answer 1

Answer: The answer is A. $60,000 increase.

Explanation: 1: The actual units sold multiplied by the budgeted sale price is equal to a total of $440000 (40000 x 11 = $ 440000)

2: The actual units sold multiplied by the actual sale price is equal to $500000 (40,000 x 12.5 = $ 500,000)

3: $500000 - $440000 = $60000 increase by the unit price factor.