Question

Milltown Company sells used cars. During the month, the dealership sold 22 cars at an average price of $15,000 each. The budget for the month was to sell 20 cars at an average price of $16,000. Compute the dealership sales volume variance for the month.

Answer 1

Sales volume variance = $32,000 favorable

Step-by-step explanation:

The sales volume variance is calculated as the difference between the budgeted and the actual sales volume multiplied by he standard price per unit

Unit

Budgeted sales units 20

Actual sales units 22

Sales volume 2

Standard price per unit ×$16,000

Sales volume variance $32,000 Favorable

Sales volume variance = $32,000