Question

Milltown Company specializes in selling used cars. During the month, the dealership sold 31 cars at an average price of $15,900 each. The budget for the month was to sell 29 cars at an average price of $16,900. Compute the dealership's sales price variance for the month.

Answer 1

The dealership's sales price variance for the month is $31,000 U

Step-by-step explanation:

In order to calculate the dealership's sales price variance for the month we would have to calculate the following formula:

Sales price variance = Actual quantity sold x (Actual price - Budgeted price)

According to the given data que have the following:

Actual quantity sold=31 cars

Actual price=$15,900

Budgeted price=$16,900

Therefore, Sales price variance = 31 * ($15,900 - $16,900)

Sales price variance = $31,000 U

The dealership's sales price variance for the month is $31,000 U