Question

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

Answer 1

The correct option is C,actual units sold are greater than budgeted sales volume

Step-by-step explanation:

Sales volume variance is said to be favorable when the number of units sold is higher than the budgeted units of sales.

Option C perfectly fits with the explanation while option B when actual units sold is less than budgeted is a about an unfavorable sales volume variance .

Option D which is a bout the selling price centered on sales price variance not sales volume variance.

All in all,volume variance is all about the number of units sold not about the price at which the sales was recorded.